The World Wide Web – a threat or an opportunity? This is a question being
asked by so many people at this time. To save you reading this complete
article, I can tell you now that the answer really is a matter of your
perspective on the business as, without a doubt, the net presents both a
threat and an opportunity.
There are cynics who would point out that there is still only relatively
limited trading on the internet. But the successes of sites such as Charles
Schwab, with billions under management in a matter of months, and Egg show
that consumers will buy on the internet if the proposition is right,
particularly where the proposition includes a price differential.
In the UK, with its complexity of regulation, online financial services
offerings have been quite slow in coming but they do offer consumers access
to masses of previously hard to find financial information, empowering them
to make informed decisions in their own right.
Consumers can already buy financial products on the internet and the
number is escalating day by day as product providers and big financial
institutions launch their internet-designed products.
More and more help engines are being produced to guide the consumer
through the complexities of how much life cover they need or how much to
put into a pension. The next step will be interactive needs analysis using
“expert systems” for those who can sit at the PC for that long.
Factors such as the sheer volume of PCs around, intensive marketing and
the escalating content of websites will produce substantial growth in this
type of selling in the future.
This will have an effect on the IFA community as certain products, such as
stakeholder (potentially), become available only through the internet. In
other words, there are products which IFAs sell today which they will sell
considerably less of over the next five years or so.
Millions of pounds are being poured into the race to forge electronic
relationships with consumers. Those of you who surf regularly will already
be aware that many of the services on offer are free, seeking to entice you
into a relationship with the site.
This is because the company's value is based largely on the volume of
unique customer relationships they have in anticipation of actual trading
volumes around the corner. It is impossible for you not to be aware of the
effect this is having on stockmarkets.
So, where will this leave IFAs? Will consumers still want face-to-face
advice and personal service when they will be able to interact with a video
image of an adviser in a call centre on their PC or via their TV? All the
market research I have seen points to two answers:
1: The majority of consumers want face-to-face advice but are prepared, or
even expect, to buy commodity products on the internet, over the phone or
both at the same time.
2: Consumers are getting a lot smarter and strongly differ entiate between
commodity products such as Isas and complex products where they want
At CMG, I work with some of the biggest IFAs in the country, helping them
formulate their business plans and the technology they need to ena ble them
to respond to consumers' needs.
The range of solutions for the future, with organisations such as Towry
Law, is not to hurtle into a web-only environment because this is not what
Towry Law is developing a multi-tier strategy which offers customers
options on how they want to deal with the company at any point in time.
This, of course, includes its salesforce. Towry Law also includes a call
centre and consumer website.
The real value to the consumer is that, where these are truly integrated,
a Towry Law customer has real choice in the way they do business.
The real value to Towry Law is that this protects its customer base from
attack by some of the new players and, in the longer term, provides
advisers with more time to provide quality face-to-face advice to customers
who want or need it by releasing advisers from some of their servicing
Organisations such as Towry Law can, of course, invest substantial sums in
strategic thinking, planning and its execution. So, where does this leave
the medium- sized or smaller operations? How will they respond? There are,
or should be, a number of options. Some IFAs already have websites up and
running. In the main, these are little more than information sites where a
consumer can read about the IFA and possibly make contact via email.
What most of these sites fail to recognise is the need to aggregate
information to consumers from a range of sources such as price feeds for
stocks and shares or mortgage rates.
It is information such as this that consumers expect to find and they are
not impressed by a site which simply says what a nice chap the IFA is.
Many of you will be members of one network or another. You should take
serious time to ask what your particular network's strategy is in terms of
supporting you on the internet and evaluate it carefully.
Is the strategy to simply provide the network with a new trading
environment to the exclusion of you, the member? Some are taking this
approach, which is of little value to you, and will seek to disenfranchise
your business from the net.
You should be looking closely for evidence of a strategy that integrates
your customers via the internet into your business. If it is not there,
then ask yourself some serious questions.
Fortunately, there are other routes open to you which should help keep
your network on its toes. The Exchange has for some time been building
consumer relationships via its moneyeXtra website and with great success.
The site is visited by thousands of people and, since its launch in
December 1998, has enabled more than 60,000 members of the public to find
IFAs all over the country.
The Exchange has also created Easitrade, which provides a range of
comparative e-commerce tools and services to IFAs that support their
With Easitrade, IFAs have the facility to launch their own bespoke
web-based services with content and value, some of which can be taken from
their existing consumer websites. Easitrade also provides an online
transaction capab ility, allowing your customers to conduct business
without you even being there – or at least present you with a very real
So, in answer to the question posed by this article, if you do nothing.
then, yes, the web will be a threat to your business as customers start to
develop electronic relationships. However, it is also a remarkable
opportunity, provided you invest wisely in it.