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Hubbub about the hub

In my earlier articles, I looked at specific areas of an IFA&#39s business to suggest ways in which technology, if used efficiently, can yield up to 80 per cent time savings.

For this final article in the series, I thought it might be interesting to look to the near future to the developments in technology that will improve the efficiency of the industry for client-servicing and new business submission.

All back-office systems will shortly be out of date. This is a radical statement when you consider that our parent company Quay Software Solutions is in the business of building back-office systems.

Why the heresy? Back-office technology was designed to help the manual entry and maintenance of data into a system that sits within an office. Technology has moved on and in many industries people work electronically in environments where data can be passed seamlessly from system to system. This method of working electronically has happened very successfully in some industries. You need look no further than the travel industry to see how technology has revolutionised the booking of holidays.

You cannot have failed to notice, however, that in the financial services industry we are behind this evolution in technology. If some IFAs do not catch up soon, they will miss the back-office stage of the revolution altogether.

We can pinpoint the reason for hold-ups in development within financial services to the inability of the systems of the provider, adviser and network to communicate in a common way. In short, all these systems talk in different languages.

As an industry, we have visualised common language systems and end-to-end processing with the concept of standard, which is a great start with Origo to focus the industry&#39s mind. But must the industry be forced to progress at the rate of the slowest to embrace the development? The answer must surely be no.

Quay Software is developing a message-hub system which enables information to be exchanged by different parties in different formats, overcoming the language barrier. This is at the heart of the next generation of Quay&#39s Link software and enables it to exchange valuation and new business information without the need to enter data manually.

You need only to look at the savings on time and cost that the introduction of this type of technology will achieve to understand why message hub systems are being developed.

Take new business processing for a company that is within a network. How many times must information be copied from paper to system only for the system to generate more paper. From my calculation, the process from adviser to provider up and down the line again could be entered into a system as much as eight times, each time the same information being entered by different admin staff.

This example, however, assumes that each time the information input is accurate. How many proposals do you have rejected each month?

Consider an application for insurance, even after the paper chase is complete one provider has reported to us that up to 40 per cent of their applications for term insurance are rejected on the grounds of incomplete, inac- curate or insufficient data. The cost savings to the industry must be huge if the information is entered just once.

Consider also valuations and the hours that are invested requesting then entering data to produce a meaningful client valuation.

The good news is that progress is already being made on this front. Already, Cofunds provides consolidated management information electronically. Imagine having your entire client portfolio of units and prices updated at the click of a button.

Link user Clive Saffer of HCF, waxes lyrical about how his business has changed since buying a system that imports and synchronises client units and valuation data from the Cofunds&#39 system.

Another example of how this messaging technology can save literally hours in even the smallest IFA business is in the area of commissions management.

The current process goes something like this – the product provider generates a commission statement which they post to the network.

The network then reconciles commission expected against those received and in turn generates a paper-based commission statement which it posts to the member.

The member takes the information from that paper and reconciles it against his expectations in his own system. This in turn is used to produce a commission statement for his advisers which he posts to them. Need I say what the adviser then does with his own statement?

Now rewind the process and consider what would happen if each of these systems were able to communicate, exchanging information electronically. The technology could do the job of matching expectation and receipt and alert the user only to mismatched items. Manual data entry will become a thing of the past.

In this series we have looked at how, using technology, you can save time on marketing, fact-finding, needs analysis and client servicing.

The savings are realistic, the question is are you equipped to take advantage of them? Seven out of the 10 IFAs that we come across either have no system or have one which they rarely use, with data that is in disrepair.

For these firms the investment is substantial. It is not necessarily the cost of technology that is the burden, it is a question of time to get systems in place, staff trained and data recorded. The return on such an investment, however, can be immense.


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