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Ian McKenna: My view on Zurich’s late wrap entry

Ian McKenna MM blog

If there is ever an award for the company with the boldest RDR strategy, then Zürich seemed to have put themselves in the Manchester United position: anyone finishing above them would win.

Having already taken the difficult, but I believe right, decision to delay the rollout of the Zurich Investment Platform, the company judged that advisers would forgive it for delivering late but not for delivering wrong.

It recently announced that effectively dealing with Zurich in a post-RDR world will mean placing investments on the platform.

Although in the short term there will continue to be post-RDR versions of their onshore and offshore bond product, the remainder of the individual packaged

products are not being migrated to the new environment.

Zurich has diversified its business in recent years, making significant inroads into the individual protection, group risk and most recently workplace platform market, with their Money4You proposition.

ZIP, however, is going to be the core of its offering in the individual savings space.

As a relatively late entrant and using FNZ technology, which is already deployed by several other platforms in the market, the company clearly needed to come up with something special to set itself apart.

Having recently had a number of opportunities to look at its platform, it appears to me that it has pulled this off.

Zurich is seeking to differentiate itself in three key ways: two-way integration between ZIP and advisers’ own systems; more of this later, the user experience and service.

Clearly, it is too early to judge the latter, however, based on the various demonstrations I have had it is certainly intuitive and far more user-friendly than a number of platforms I can think of.

As far as integration is concerned, I recently had the opportunity to examine how this works with Distribution Technology and there is no doubt that the amount of data that is moved seamlessly between ZIP and DT and back is significantly in advance of most platforms, the way in which information is shared between both the platform and the adviser software will save a significant amount of re-keying on the part of advisers making ZIP much easier to work with.

While this is a real step forward, it is not perfect and there were several instances where I felt that had more effort been made on the part of both organisations, a seamless integration could have been achieved.

This would be highly desirable.

There is also a two-way integration with Intelliflo, however, I have not had the opportunity to see this so cannot comment on if it matches the high standard set with Distribution Technology.

The platform also offers extensive integration with FE investment tools, enabling the creation of extensive fund analysis data and fact sheets in a consistent style.

This also extends into model portfolio analysis and again there is a more detailed integration between the platform and Distribution Technology’s adviser software for investment switching.

All the adviser tools are branded as FE and cover the entire FE fund universe not just the funds represented on the platform.

For advisers that use FE Analytics there is a link to this system and for non-users an advantageous discount has been negotiated.

There is a further integration to the eValue tools although I am less able to be enthusiastic about this.

To be fair, I would probably be a keen advocate of eValue if FE was more transparent about how the tools work.

Personally, I can not reconcile the lack of information on this with the current FSA requirements for advisers to fully understand how any tools used in the assessing suitability process actually operate.

This is not a specific Zurich issue and would apply to anyone using eValue tools whatever the source but it is an issue advisers should probably consider.

Another important innovation being worked on for delivery in Q1 2013 is the ability for advisers to record and update details of legacy Sterling, Eagle Star and Allied Dunbar products on the platform in ways that will allow adviser charging against those products.

As with virtually all platforms, there is a notepad facility to record legacy contracts. This will be supplemented with a contract enquiry-type of valuation capability for legacy plans, which I understand will support most if not all of its historic product range.

By enabling real-time valuations in this way, advisers will then be able to include the investments in such contracts in any ad valorem advice charges addressed through the cash account in ZIP.

What is being delivered here puts Zurich in a very strong position to capture significant market share and deliver real operating economies to advisers.

By going the extra mile in terms of integration with Distribution Technology and possibly others, Zurich has shown what can be achieved.

However, as identified above, there is still further scope for improvement, so while the delivery of a platform with improved technology integration to advisers does put Zurich at the forefront, until it goes to the next stage and delivers a truly seamless environment, there is the opportunity for others to overtake it.

That said, the work that Zürich has done shows quite how limited most other platforms are when it comes to third-party system integration.

Obviously it is important to recognise that getting to market with a platform proposition is not the end of the journey, indeed, it is only the end of the first phase.

Like any other platform it will be important for them to make significant ongoing investment to stay at the leading edge.

Overall, I would say that the Zurich Investment Platform has been well worth the wait and it is refreshing to see the depth of technology integration that has been provided.

Other platforms would do well to follow this lead and it should certainly put Zurich in a strong position in the post-RDR advice market.

Ian McKenna is director of the Finance & Technology Research Centre


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There are 2 comments at the moment, we would love to hear your opinion too.

  1. It is a shame that Zurich didn’t delay the canning of a large percentage of their broker consultants though. All we have had is months and months of a very able broker consultant telling us the platform was coming, eventually it came and they went. I have no idea where to find out about it or be shown anything about it and so won’t use it. We have no support from Zurich and if, as I suspect, Crapita have anything to do with any of the administration I shall run a country mile if eventually anyone does come a’knocking. Sadly the beancounters have eroded and now finally destroyed what was a great company.

  2. If you look at the history of this company and the products it offers in the offshore market you might think twice about this company. They still use an algebraic equation for clients to decipher charging structure. That was banned in UK under A Dunbar but it morphed into Zurich’s present ‘client charging disclosure’ – I have seen it in Singapore. When you break it down the client stands zero chance of making money.
    I don’t like companies who run with the fox and hunt with the hounds.
    Equitable life used to do it, they had a subsidiary for IFA’s and annoyingly they paid only half commission and were always a tiny bit cheaper for the clients on the comparison quotation system- I used to explain to clients how equitable made it to the top and why I do not want to use this subsidiary and clients accepted my choice of other companies.

    The article goes into detail about the Zurich platform product but as Mervin King (the hindsight guy) says “too much emphasis on detail rather than whether we are actually going in the right direction”. Choosing Zurich for me is an easy decision- I will leave it on the shelf.

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