We have all seen clients become more savvy when it comes to their finances. Their expectations have resulted in the multi-channel complexities we see today. But what role does the internet play and will the service ever meet client demands?
Multi-channel deployment is not completely new but added features are moving at a fast rate. As clients' time becomes more precious, what could be better than a web-based solution detailing in one place all their assets and liabilities? Include within this real-time pricing and they have a truly up-to-date position of their finances.
This technology is not new in the US, where it is a popular feature for clients. Moves are being made not only to record assets and liabilities but also to add in drag-and-drop facilities on the site.
This will allow consumers to look at their credit card balances, view the rates charged by other providers and literally drag their balance to that new provider to benefit from lower rates. The same may be achieved for savings, banking and mortgages.
For cost-driven products such as credit cards, the switch could be simple so long as the credit companies play ball. This latest feature would add a whole new dimension of competition among providers. As in the UK remortgage market, some providers may take the stance of not encouraging or accepting this form of rate switching but this would only result in a lower market share in the long run.
Add to the service news related to the consumer's holdings and interests and they have a one-stop site for a balanced financial picture. This will allow both clients and their advisers to better understand their needs through a better picture of their circumstances.
The client benefits from competitive and flexible product pricing. With a real-time picture backed up by annual advisory reviews, the client will be in a strong position.
But face-to-face advice will still very much form an important part of the service, as there are many products that are not just price-dependent. Quality advice matched to their needs will be provided by quality IFAs backed with the added service of an up-to-date view of their circumstances.
For those wanting to pay for an ongoing service, a paraplanner can back up the adviser. At the annual review (or more often if required) with the adviser, the fact-find can be updated. The fact-find data then prepopulates application forms, which can then be sent to the client to check and sign for onward transmission to the provider.
The ability to drag and drop balances is some way off. We first have to get providers to agree. Look how supportive banks are of switching accounts with direct debits.
The first area to be facilitated is likely to be credit cards as there is already a culture of balance switching and virtually no brand loyalty in this arena. However, if sectors remain inflexible to the changes, this problem could be bypassed. For example, in the case of banking, the reason it is difficult to switch is the delay on moving direct debits. However, by storing all direct debit information on the site, the client could merely cancel the old ones and send the new ones to the new bank.
Technology is moving fast in our industry – sometimes too fast. What is evident now is that research and development is geared towards clients' needs and not the pure interests of the provider.
It has never been a better time for clients so long as charging is set at a level that supports the adviser so that they are not priced out of the market. Then we will all benefit.
Colin Bell is project co-ordinator at Charcol