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IT&#39s the real thing for Towry Law

There can be little doubt Towry Law has been one of the major success stories of the last few years in the IFA sector. You only have to look at the share price, which has risen in less than two years from a low of around 40p to the current level of just under £2.

This may be slightly below the high of £2.25 achieved in the spring but one report from its broker, Charles Stanley, recently suggested a target price of around £5 within a couple of years.

This may sound optimistic but you have to take into account the way in which the company has grown in the last year, taking over four other IFA firms including Advizas (formerly Hogg Robinson), which was one of the country&#39s biggest IFAs in its own right. With over 300 registered individuals, the company is now very much one of the market leaders.

So what as a company is it doing differently? One important area has been Towry Law&#39s investment in technology. According to chief executive Douglas Black, the company specialises in what it is good at – giving financial advice – and outsources everything else. When it comes to technology, this means its entire IT function is operated by CMG under a £17m 10-year contract.

I spent most of last week participating in a series of roadshows organised by CMG to demonstrate to IFAs and product providers its vision of the future of technology in the financial advice market.

These events were organised to promote the release of version 3.0 of CMG&#39s Consultor back-office system. This is the first version that integrates with the Professional Independent Adviser system that CMG acquired when it took over software house Microlex two years ago.

Towry Law chief operating officer Keith Webb presented a session that examined in detail the benefits to his organisation of using these tools.

Integrating the two systems has meant that information entered at any point within the business can be accessed by anyone else who needs it – advisers on the road, staff within any of the 20 branches around the world from London to Bahrain, Dubai and Tokyo or in the central processing units in London and Hong Kong.

Towry Law has been able to harmonise the whole advice process from fact-find through needs&#39 analysis to best advice and report writing, with all the documentation being distributed from a central despatch centre in Leeds.

It has been able to cut the time taken to produce client reports from two to three weeks to within four days. This has been achieved without any increase in support staff and despite the fact that the number of registered individuals for whom such facilities are being provided has increased from 90 to nearly 300 in the UK alone.

According to Webb, this has enabled the company to deliver significant benefits to both clients and shareholders.

He says: “Using the workflow facilities provided by Consultor, we have been able to map and review all our processes. We have better, cleaner data and, as a result, have been able to significantly raise our quality of service to customers.

“At the same time, having a fully identified set of processes for everything enables us to effectively &#39de-risk&#39 the business, which has obvious attractions for our shareholders”.

The workflow facilities actually drive the users down specific predetermined routes to carry out any task. Each action is prompted as the previous one is completed and a fully documented audit trail is created. This has massive benefits from a compliance perspective.

Webb also believes that having such systems in place will make it far easier for his organisation to establish fully-compliant businesses in other countries and to market new products such as stakeholder.

To coincide with the roadshows, CMG and Towry Law have published a white paper giving their views on stakeholder pensions, how they will affect the market and the impact on product providers, IFAs, employers and employees.

With the next release of PIAS software in November, Towry Law advisers will have access to the electronic new-business process created out of the industry&#39s New Business E-commerce project in which both Towry Law and I have been heavily involved.

I will be reviewing these new services in a couple of weeks but it is worth pointing out the ability to use so much high-quality data from within its systems will make it easy for Towry Law to make maximum use of pre-population of existing information in these services. With three million consumers using online banking services, it is only natural they will expect to be able to access information on other financial products with similar ease.

This quality of technology is not cheap. Towry Law has spent in the region of £3m implementing its system and any firm wanting to take advantage of the Consultor software is not going to see any change of out £250,000 or double that if you want the PIAS point-of-sale software as well.

Webb justifies his investment by pointing out it will be recouped by the savings that Towry Law is achieving over the previous manual processes employed by just one of the businesses it has taken over in the past year. By making such a substantial investment in technology and putting it truly at the heart of its business, I believe Towry Law has placed itself to take advantage of the benefits of e-commerce.

As someone who has long argued that the future of the IFA market rests with bigger organisations, not least because they have deep enough pockets to invest in the technology that will be essential to maintain a competitive edge in the future, I am greatly encouraged to see an IFA firm actually putting into practice what so many are talking about.

Any organisation that wants to be a real market leader in the years ahead should seriously consider following its lead.

A copy of the CMG/Towry Law white paper on stakeholder pensions can be obtained by sending an email request to lifeandpensions@cmgplc.com.

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