IFAs calling for switch over to e-commission

Leading IFAs want to scrap paper commission statements completely and process payments electronically.

The Advisory Technology Forum, a group of 10 IFA firms set up to take the technology agenda to the providers, has produced a report on the e-commission process.

The forum includes Bankhall, Inter-Alliance, Thompsons IFA group, Solicitors for Independent Financial Advice and Barclays Financial Services, which includes Woolwich IFA Services and Sedg-wick IFA.

Its report reveals that 91 per cent of IFAs surveyed from the member firms would get rid of paper statements entirely if a better “full” technology solution was available.

But it found that more than 80 per cent of product providers are still dealing with advisers by using a paper format.

Fifty-five per cent of IFAs said all the commission statements that they received electronically used different versions of Origo.

The results show that more than 40 per cent of product providers using EDI are using different Origo standards. The group concluded that it would be impossible to expect product providers to keep updating their own versions of Origo.

The research concludes that core Origo standards offer too many optional fields and that any adjustment made to EDI commission on areas like renewal and clawbacks, produce additional processing and costs.

Financial Technology Research centre managing director Ian Mc Kenna says: “Even among the biggest IFA firms, only a minority are using EDI to process from beginning to end. The group believes that commission represents a major savings opportunity for the industry as a whole.”