Today sees the launch of one of the most compelling personal finance apps I have seen to date. My Planning is the first in a series of web and iPad apps being developed by Distribution Technology.
This is specifically designed to assist advisers in supporting those clients for whom traditional face-to-face advice will be unaffordable in the post-RDR world. The iPad app is available to download free from Apple’s App Store from June 21 but requires the adviser to activate a Customer Access Licence for users.
The adviser pays £5 pounds per user per month, but can build in an additional margin when reselling the service to the client should they wish.
To look at how this might work in practice, for a client with only £50,000 invested, assuming a 50 basis point adviser charge is made, even if VAT applies, the IFA still has a potential surplus of £178 per year which might cover the cost of a small amount of telephone-based contact.
The service will clearly work particularly well where the adviser chooses investments that have been matched to the Distribution Technology risk profiler. Twenty seven asset management groups have now had such work carried out for over 200 funds. Consequently an adviser selecting such funds is then able to be confident that the client’s assets will remain within the risk profile they have agreed. This is a highly innovative approach to managing and delivering advice at low cost in accordance with the FSA suitability requirements.
This is the first time I have seen a technology supplier market an app with the explicit intention of supporting those clients who will not be able to afford traditional advice. This should be welcomed by advisers, the broader industry and the FSA.
The app itself is beautifully executed using high-quality graphics which render in high definition on the new (version 3) iPad. On entering the app, which can be white labelled to reflect the adviser brand, the client sees three areas, the first “My Wealth”, provides the user with both a summary and individual breakdown of their income, outgoings, property, investments, pensions, protection, liabilities and other assets.
In additio, in the summary screen presents both a client’s target and current risk level for investment and retirement savings as well as aggregated summaries of assets and liabilities and income and expenditure. The valuation information is updated nightly and refreshed each time the customer logs in.
The client can easily drill down into each of the elements listed above and where multiple items are shown they can drill down to a further suitable level of detail. The app is wonderfully intuitive making full use of the swipe function within the Apple mobile operating system. It is perhaps easy to forget that it is only just over two years since the first iPads became available in the UK market, during this time they have transformed the way in which increasing numbers of consumers access online information.
It is very clear to see how this app could be used to deliver a remote proposition economically to consumers. Presently the adviser will need to have taken the client through the full “know your client” process, conducted a risk profiling analysis, agreed the client’s goals and objectives and populated all their existing investment details to a full version of the Distribution Technology software.
It is my understanding that a further version of the app will go live later this year which does include risk profiling in the content delivered to the client.
The adviser will clearly have to agree a viable commercial model for this initial activity, for example this might be operated on the basis of a fixed fee initial service to take on the client and then a triage approach to advice as it is necessary.
During such an initial session the adviser would need to address other suitability issues such as the client’s risk tolerance and capacity for risk.
To operate the service advisers will need at least one licence for the full Distribution Technology product at a cost of £85 per month plus VAT.
Within this price the adviser also receives the company’s full Front Office, risk profiling, asset allocation/ portfolio construction and client management software. Included within this is an outstanding proposition management and workflow solution which is one of the best examples of the sort of software advisers need to manage, deliver and audit post-RDR advice propositions that I have yet seen. There is a configuration charge of £499 for the iPad app to reflect the adviser’s brand and logo and firms have to buy the Client Access Licences in blocks of ten.
The remaining two sections of the app are relatively simple, a “My adviser” area provides details of the individual’s IFA, their address, a location map and e-mail address, although noticeably not their phone number. This area also provides the client with an area through which they can send a message to the adviser. There is also a “My documents” area where communications with the client can be stored, for example the suitability report.
The app in its current format is a highly compelling but static representation of the client information. Whilst it would be easy to provide a long list of further enhancements it would be nice to see, it should be recognised that this is a first generation app and is vastly superior to other initial offerings I have seen from organisations with far larger budgets than Distribution Technology and the company deserves considerable credit for delivering this app.
An extended version of this summary which considers the wider implications for advisers and the market generally of this launch can be found at F&TRC’s AdviserSoftware.com Linkedin group which can be reached from here
Ian McKenna is director at Finance & Technology Research Centre