In the last two weeks, I have looked at ways in which the communications revolution will change for ever the way in which we will deal with clients.
First, I examined why it is essential for any business, big or small, to have an online communications strategy. Then I considered how some product providers are rising to this challenge.
Over the next three weeks, however, I will get to the heart of the matter as far as the majority of readers are concerned. What should the IFA do to take advantage of this rapidly changing world?
This will involve an examination of the three key initiatives that have to date been announced which I believe offer the greatest benefits to the IFA community.
They have a number of key attributes that I would expect any initiative to possess before being able to commend it to readers.
It is important at this stage to be totally clear that each of the solutions that I will examine in the coming weeks are ones where I work actively with the companies involved as a professional adviser.
But then, the criteria that I will outline below are not just those which I would recommend that any IFA applies before participating in an initiative but the ones that I apply myself and those which I believe that product providers should apply before supporting any online communications service.
There are two key issues that I believe are paramount – size and strength.
To be worthy of support, I believe that any system must have a unique selling proposition that will virtually guarantee its use by large numbers of IFAs. This means getting IFAs to build the system into their core working practices, not just distributing it widely.
This critical mass is also essential to keep down the price.
For too long, the IFA community has suffered from the fact that most IFA software companies offer poor-quality software that is overpriced and uses out-of-date tools
There have been far too many providers with too few users to achieve any economy of scale. Consequently, their products are disproportionately expensive for the value they deliver.
How many IFA software houses have yet to deliver Windows versions and, when they do, at what cost? I recently came across a firm of three registered individuals which had been asked for £40,000 just to upgrade their software from Dos to Windows.
I liken a number of the new software houses now coming on to the markets to the supermarkets which can deliver price and value because of their buying power. By comparison, the majority of existing IFA software houses are corner shops and I see them going exactly the way of many other corner shops – out of business.
Building quality software is a multi-million-pound business. You need major resources, big helpdesks and the ability to deploy additional developers in key areas at short notice when problems inevitably arise. You also need the financial strength to back all these.
No IFA would ever recommend products to clients where the provider had little or no financial strength, yet thousands of IFAs buy software from companies in exactly this position.
So, if financial strength is a major key to success, who has been one of the major success stories of the 1990s in financial services? You do not have to think long about that question before you come up with the name of DBS Financial Management.
Since DBS acquired Assure Soft a year ago, the development and helpdesk teams have more than doubled and are likely to do so again in the next 12 months.
This is one of the reasons why the AssureWeb initiative from AssureSoft is one of my favourites to deliver real value to the IFA.
The system is being built around the needs of DBS members but is not restricted to them and may have many facilities that will be very useful for other IFAs.
However, I believe it is essential for DBS members to sign up for AssureWeb immediately. I firmly believe that the technology which IFAs deploy in the next couple of years will not only be pivotal to their success but to their very survival.
Technology has already reached the stage where it is probably too big for small independent IFAs to tackle on their own. Help is needed. In the next couple of years, I believe that IFAs will either have to join networks or other support services to help them achieve the economies of scale necessary to make quality systems affordable. My message to any member of any network is clear. If you are looking at your technology options, find out what you network is doing.
The only rider I would add is to make sure that your network is big enough to be able to fund substantial technology development. If it is not, then it may be time to find a new network.
AssureWeb is still in its early stages of development but it is already possible to get value from the service and a clear flavour of what is to come. DBS members can access a vast array of essential information, compliance bulletins, marketing material, technical documents and information from product providers.
Users also get unlimited access to the internet, email access to product providers to request additional hard copy documentation and the opportunity to access the Money Marketing Product Directory for a guide to financial products available. There are also direct links to websites run by over a dozen product providers.
A wide range of online compliance and training services are in development.
Now we come to the crucial question – how much does it cost? Believe it or not, only £10 a month for DBS members and £15 for other users, both subject to VAT. You can pay more than that for internet access alone. However, existing AssureSoft customers will be offered the services for free in the future.
DBS IT director David Child is clear about what the network is aiming to achieve. Last week, he told me: "We aim to increase business levels between product provider members and IFA subscribers and to reduce the cost of effecting that business.
"Business costs are reduced by AssureWeb's communications improvements, which ensure that information is up to date and immediate via a low-cost medium.
"The service already offers a broad range of facilities which will be extended in the future to include the provision of quotations, electronic new business submission and policy servicing information."
Delivering this will represent no mean feat for AssureSoft or anyone else looking to provide similar facilities. However, given DBS's track rec ord over the last few years, I would not bet against them achieving it.