One of the key reasons given for the reform of polarisation is the need to give consumers a wider and fairer choice of financial products.The wisdom or otherwise of this thinking has already occupied many column inches so all I will add is that such changes might never have been put forward if our entire industry had made a more thorough job of managing relationships and interactions with its clients. Securing distribution capability will be one of the major challenges for providers but what may prove to be more challenging for them will be the management of its relationship with business introducers while doing it cost-eff-ectively and responding to the needs of a diverse range of clients. Providers are faced with the additional challenge of doing it all profitably and in ways which add value. Most IFAs I have spoken to say that paying higher commission is definitely not the same thing as adding value. Depolarisation should bring in a time of fundamental reform in providers’ approach to working with intermediaries. The providers most likely to earn the respect of their business introducers will be those which are brave enough to cast off their traditional sales/service proposition and seek to build partnerships with IFAs through a community approach to business development through more creative uses of technology. The reform will need to go well beyond greater use of email, information-laden websites or making it easier for intermediaries to place business. Despite advances in technology, many providers are criticised for their inability to maintain consistently high service standards or to convince intermediaries that they are serious about working in partnership with them. But, I hear marketing directors ask, how can more creative use of technology and a community approach to business development possibly satisfy shareholders? For the simple reason that the UK financial services community continues to struggle to connect with the buying public to any great degree – and it is not just prov-iders which struggle to connect with the public. What we need to do is to create a culture of saving right from childhood. I am not so naive as to imagine that this can be achieved overnight but it is possible to start the process by influencing people at a local and community level by using the internet to con- nect people and to foster communication. What about IFAs? Intermediaries are passionate about what they do but many have become blinkered to new opp-ortunities in the way they promote their services. I hasten to add that this is not a criticism but it is a fact. It is just as well that IFAs are passionate about what they do because the challenge for intermediaries of all descriptions over the next few years is scary. They must:Clearly differentiate their business activities from the activities of other advisers.Better understand clients’ and prospects’ lifestyles and financial needs at individual and community levels.Build strong advocates for their services through a network of satisfied clients (note a network, not a list).Focus promotional activities on generating multiple word -of-mouth referrals.Increase numbers of clients and sales but with considerably lower acquisition costs.Increase the speed at which prospects become clients.Dramatically cut operating costs and increase profitability per client.Open minds to embrace and experiment with new forms of marketing and communication with clients. Anyone who has enjoyed surfing the net in recent years will be aware of online communities, forums, chat rooms and message boards. To the uninitiated, the phrase chatroom can conjure up images of a place where teenagers gather for hours to talk rubbish or where undesirables trawl for unwary prey. But this is precisely where the future lies for financial services. Our industry has a strong grasp on the idea that we must start to embrace the benefits of technology. Yes, we really do understand that there are significant savings to be made in both the back office and distribution. The problem is that we have been saying this for the last 25 years. Until the whole industry gets a handle on even the basics of creating efficiencies through technology, we have not got the slightest chance of using it to make the quantum steps forward that will shake off our current outdated sales/ service propositions which so manifestly hold us back from building trust, respect and val-uable connections with the investing public. It is also clear that our industry does not remotely understand how the internet is being used by our customers to communicate, share information and interact with each other. We are missing a huge trick but it is not too late. Quietly, some innovative companies around the world are realising that traditional marketing methods are losing their gloss. The buying public are considerably more sophisticated than just a few years ago and they are now prepared to question what they read, see and hear from advertisers. Increasingly, they are seeking further verification about a product or service before they open their wallet. They talk to their network of business associates, friends and relatives and increasingly they talk to complete strangers. They do this on the internet in forums, on message boards, in blogs, in online clubs and groups and in social and business networks. Take, for example, the rise of ebay. Some would say that ebay is nothing more than a cross between a car boot sale and an auction room conducted on the internet. At least at a car boot sale or at an auction, you can see and touch the goods. How can you possibly be sure that you are going to get the art-icle that is advertised? Be-ause members of ebay police themselves by grading each other according to the buying or selling experience you have had with them. Reputation is everything – and reputation is spread by word of mouth (or the electronic equivalent). Innovative companies are realising the importance of word-of-mouth marketing and are starting to utilise it to great effect. Some firms are setting up permanent online facilities for customers to share their everyday thoughts, concerns and ideas. These are not just the online equivalent of a customer feedback form, they are online communities where people can drop in, take part in discussions, polls and real-time chat, post and read articles, join or start clubs, advertise events, listen to web casts and so on. In fact, just about anything that “real” communities do. But, as other online social and business groups are discovering, the network will start to take on a life of its own – again just like a real community – and, as it does so, companies providing such a service will reap rewards that they would never imagined possible. Take the online business networking site Ecademy which describes itself as “a business exchange that connects people to knowledge, contacts, support and business. It will help you to network across town, across country and across the globe, at a time that is convenient to you.” It works on the old-fashioned principle that people buy people and the more contacts or people you have in your network, the better connected you are. People who are well connected are attractive to others and likely to be in a good position to help others – and help others they do. There is much that the financial services industry could learn from online social and business networks. Intermediaries could particularly benefit from building traditional and online networking activities into their daily routine and the great thing about doing it online is that you do not need to put time aside to leave the office and attend a meeting. The concept of social and business networks is all well and good but if it does not produce new business, then what is the point of adding to an already hectic life? In fact, that is the whole point. It is the social interaction between people that is the initial attraction which, after a period of building trust, often leads to business being written. Indeed, many readers of this article will appreciate that it is often the most unexpec-ted and random of connections made over the years which lead to the most fruitful business relationships. The key is to keep the plates spinning but we all know how difficult that can be as we are obliged to search for the next piece of business. But ironically, if we reverse this business model so that our networking activities become our marketing activities, we can effectively kill two birds with one stone and create a network which is both socially rewarding and which creates hundreds of advocates for our services. Again, this is word-of-mouth marketing at its finest. If we go out of our way to turn our client list into a live network rather than just files in a drawer which emerge once or twice a year, we are then able to maintain almost constant contact with the people who bring in our income. Our entire industry is missing out on the phenomenon of online networking and we would be well advised to get involved. If we do not not, we will continue to fail to connect with the investing public and we will still be talking about a savings crisis in 20 years time. Networking (both on and offline) is the obvious solution and the more you put into this activity, the more you will get back. We ignore the growth of networking within online communities at our peril. If you would like to find out more about online networking, please contact me at p.calvert@ pioneer-friendly.co.uk.