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Independent view

What mortgage-related software do you use to help you advise your clients?

A gentleman doing some research on our usage of a well-known software package recently put this question to me. My answer was “none”. This is because we simply do not get involved in advising clients about their mortgages.

We always recommend that they seek the advice of an expert on the subject of mortgages and then we introduce them to an IFA who specialises in this subject. Someone else recently described this to me as a “strategic partnership”. We don&#39t think of it this way but perhaps that is what it is.

Sounds very upmarket doesn&#39t it, but it set me thinking that perhaps one future for the IFA is specialisation, with all non-core business being farmed out to other specialists.

This might seem like a brave stance but, if you think about it, it makes a great deal of business sense. First of all, we would have to get over the inbuilt fear about giving up ownership of the client. If I had a pound for each time I have heard the expression “client ownership”, I would be a very rich man. The reality is no one individual or firm owns a client, that is patent nonsense.

We look after clients until they, or we, move on to other things. Either they outgrow us or we re-engineer our business and move into new markets. I don&#39t want to make this sound like clients or IFAs are transient, fickle people but the reality is we all do change.

So. if client ownership is not an issue. what is the problem? Perhaps it is about fear of loss of revenue. If we introduce them to another adviser, we run the risk of losing revenue in the short term.

But the reality is once again different from the perception. A win/win deal can easily be arranged with the IFA to whom the introduction is to be made. The trick, if there is one, is to find the firm or individual you can trust and one who will deliver the same level of service that your client has come to expect from you. In fact, that is exactly the exercise that your client had to go through to find you. The IFA market is so dynamic that it should not be difficult to find a firm to whom you and your clients can relate.

The benefit of specialisation is that you can focus all your resources and skills to best effect. This should make you much more efficient and effective and thus lead to greater profits. In addition, your processes can be made more robust and therefore make it less likely that mistakes will be made.

Rather than spending hours researching products and rules about a subject you only deal with once in a blue moon, you can pass the case over to the person who deals with this subject day in day out. Of course, reciprocation is needed and the flow of leads should be two ways.

One of our objectives is to specialise in the more technical aspects of retirement planning, things like income draw-down, pension transfers, Sipps and SSASs. Of course, these all involve investment advice and the need to identify and structure investment portfolios suitable to the client. This results in a great deal of research time and effort. It has occurred to us that we might do worse than to team up with a firm of investment specialists and co-operate to better effect.

There is also the issue of simple products. More and more, it will become easier for the consumer to purchase savings and protection plans from direct providers and via electronic means. I accept that in most instances there is the need for an intermediary but not always.

The IFA of the future might well become a specialist concentrating on the more complex issues where they can add real value to the lives of their customers. Strategic partnerships provide the benefits and attributes of a big organisation without the costs of a suitably large infrastructure and they represent an important opportunity for the IFA of the future.

Nick Bamford is managing director of Informed Choice


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