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B2C or not B2C? That shouldn&#39t be question for IFAs

One subject which is probably causing many sleepless nights for senior

managers with life offices is the increasing dominance of technology

companies in IFA product distribution.

The recent acquisition of Bankhall by Lynx is the latest such move but,

without doubt, when considering this issue, there is one organisation that

come to mind before all others – Misys.

Misys already owns Countrywide and its acquisitions within the last year

of Financial Options, Kestrel and – subject to Monopolies and Mergers

Commission app-roval – ie Group have made the various Misys IFA interests

add up to the biggestIFA network of all.

This has proved an excellent way to capture the attention of product

providers. Over a similar period, the group has also announced its plans

to launch financial services portals for both the business-to-business

(B2B) and business-to-consumer (B2C) communities.

When Misys first announced its intentions last year, it was suggested that

it would have the former service up and running by the year-end. Some

industry analysts, myself included, felt this was wildly optimistic and,

within a short time, the launch date of the B2B channel was being referred

to as second quarter of this year. This is a date that has been consistent

and it is no small tribute to the efforts or ability of Misys that, early

last week, the first IFAs will have received CD-Roms containing its m-link


If yours has yet to arrive, don&#39t think you have been ignored. Although

the company plans to send copies to 20,000 registered individuals before

the end of June, disks are initially only being released at a rate of 50 a

day in order to deal with any difficulties that may arise.

I believe this is in the best interests of all concerned and, for reasons

I will examine later, at this stage, those who have not yet received their

copies are not currently missing a great deal.

When the mass market roll-out does take place, it will include not only

the illustration service that I will examine here but also the electronic

new business tools that will enable end-to-end transmission of data from

IFAs to insurers using the Origo-defined declaration approach and the Origo

data standards.

The service, as initially being rolled out, comprises two elements. The

first is a quotation engine able to generate comparative or

company-specific illustrations for investment, mortgage-related, retirement

and protection products.

The interface is highly intuitive and simple to use. With no training, I

was able to produce illustrations in a few minutes of having installed the

software. Quotation requests can be created offline and then requested

online. The time taken to get responses to quotation requests was

impressive but, sadly, the result was not.

I requested illustrations under each of the above categories. To be fair,

these were being carried out only days after the service went live but the

limited number of providers from which I was able to get illustrations was


For all its ease of use at the front end, it will not be possible to carry

out a full assessment of the strengths of this service until it is far more

fully populated with product providers and contracts.

The bond comparison quote only returned figures from NPI, with Axa

notifying an error being returned from the m-link server and Scottish

Mutual showing an error from the provider server.

The mortgage protection quote produced a premium from Permanent and error

messages from the m-link server for Swiss Life.

Level term insurance again gave a Permanent premium, an m-link server

error for Swiss Life and a similar error for Friends Provident.

Most curious was the response to a personal pension comparison. This

produced illustrations from National Mutual, Scottish Life and Scottish

Amicable, even though the latter also showed an error from the m-link

server. But, most confusingly, it managed to send an m-link server error

back from Swiss Life for its Mortgage Solutions product – which seems

strange in a pension comparison.

With the exception of those mentioned above, nothing else appeared from

any other provider.

It is early days for this service and it would be totally wrong to reach

any major negative conclusions based on testing so early into itspublic

launch. I will be keeping a close eye on how this product develops over the

next few weeks.

I expect to return to this issue in the near future when it has been

possible to carry out more exhaustive tests and also to look at many of the

other m-link facilities. These are primarily included within the second

part of the system at the site.

These will include a product research and comparison service and IFA

website development tools. At the time of writing, Misys could not give me

access to these tools but has promised to do so shortly.

When Misys announced it was entering the market with both B2B and B2C

propositions, early statements appeared to me to be indicating that it

would, in due course, be offering a full range of financial services direct

to consumers online.

But the company&#39s position now appears to have movedto an intention to

offer only simple products direct to consumers online and to avoid anything

that might need financial advice.

Personally, while not for a moment questioning Misys&#39 intention to proceed

in this way, in reality, I feel it is lik-ely sooner or later to run into

practical difficulties that will make such a position unsustainable.

In a 1 per cent world, what is a simple product? If all pension plans

become indistinguishable in terms of price and features, as an increasing

number of providers are now suggesting will happen as a result of

stakeholder, at what stage do they become simple products? Does it matter?

That Misys, or any other technology organisation, may seek to compete with

IFAs through new media distribution should not, in my opinion, be criteria

for judging their offerings. These should be considered on their own


I am sure no IFA would refuse to place business with a life office which

was clearly the best provider for the client, simply because of the fact

that the same company might have a direct-sales or internet arm. So why

apply such criteria for choosing a technology provider?

The emergence of competition in the delivery of electronic services is

undoubtedly a good thing. For the immediate future, the launch of the Misys

service has to be good for IFAs, their clients and product providers.

It will only, however, be possible to really judge the quality of this and

other new offerings once they have a fully populated list of product

providers supporting a full range of products. Until then, the jury must be

out on the long-term case.


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