With the end of tax business rush safely out of the way, now is a good time for IFAs to spend investigating some of the new technology products and services that have emerged over the last few months.
None of these can be more important than the electronic new business services that are now available from four different service providers. It is great to see advisers having a real choice in this important area.
Most of the service providers now have a number of insurers live for electronic bonds. M-Link is focusing on achieving a critical mass of life offices supporting its quotations services and testing with a large number of insurers with a view to having a wider new business offering live once the extended quotations service is live.
A recent survey carried out by the Exchange at one of its eXcom events identified that 53 per cent of IFA firms expect to make significant use of electronic new business services, with a further 23 per cent expecting to use them on an occasional basis. Only 4 per cent of advisers said they would not be using the services at all – presumably they are planning to retire in the near future.
Equally encouraging is the fact that at long last a small number of insurers are actually providing special terms for business submitted in this way.
Norwich Union is now providing an extra 0.25 per cent allocation on all bonds sold through e-commerce channels. This really should drive all IFAs using Norwich Union for bonds to take advantage of the electronic services – unless they believe they can justify giving their clients something less than best advice.
Legal & General is offering an extra 15 per cent of Lautro commission on applications submitted via its online term service. Although the latter is not strictly part of the main industry new business service, it is available via both the AssureWeb and Exchange portals.
It is not surprising that the IFA firm reaping the greatest rewards at this time is Towry Law, recent winners of the best use of media category at the Money Marketing awards.
The company has made a massive contribution to the industry new business project over the last 18 months. From transaction figures quoted to me recently, I suspect it may generating as much electronic new business as the rest of the IFA community put together.
To be fair, it does have a couple of advantages in this respect. First, the integration between its back office system and the new business service is by far the easiest to use that I have seen, primarily because it is fully mapped to their back office system so that the vast majority of the information is automatically populated to the PACs (product application component, the electronic equivalent of proposal forms). The amount of information the adviser has to type in is kept to the absolute minimum.
A further step the company has taken is to allow administration staff to be able to populate PACs for their CMG Consulter, back-office system. This means the adviser – in front of the client – can use a paper data capture form and the standard declaration in place of a conventional proposal.
In so doing, Towry Law seems to be taking a pragmatic view. Life offices will be able to receive the benefits of straight-through processing immediately, while Towry Law advisers in the field become fully trained. It must be encouraging for life offices to see a major IFA doing so much to assist them in achieving economies.
I understand CMG is now considering allowing its links to the PACs to be used with other back-office system providers. This is a move that backoffice providers would do well to embrace. Having seen examples of the new business services with and without such integration, I would expect those advisers who have such facilities to write more electronic business more quickly.
I can entirely understand IFAs may have some reticence in using any of the new business services for the first time to transact actual business, without having had any training or the opportunity to practice with the system. When I last wrote about the new business service a couple of months ago, I bemoaned the fact that little was being done in terms of product providers working in cooperation to organise events and training for the IFA community. I am now glad to say this is changing.
A number of service providers are planning events to help advisers get to grips with the new services. AssureWeb and Synaptic have both announced a series of training roadshows to give IFAs the chance to try their respective offerings, details of which are shown below. In addition, AssureWeb, M-Link and Synaptic are all exhibiting their services at the forthcoming Money Marketing IFA UK exhibitions.
The Exchange also run its separate eXcom events. AssureWeb has already distributed around 15,000 CD-Roms to all its registered users demonstrating its new business service and the Exchange tells me they have plans to produce a similar disk.
I believe, however, the best way for IFAs to be able to get to grips with new online services it for service providers to provide fully usable online practice services. This allows advisers to become comfortable with using new services at a time and place to suit themselves.
AssureWeb has recently added a sample provider Bond PAC to its service to provide exactly this facility, although for the time being it does not yet have a sample quotation that can be used to demonstrate how the pre-population will work. This is a move I believe all the other service providers should follow.
It is important that all advisers get the opportunity to see how they can benefit from electronic new business at the earliest opportunity. The events listed in the table below are well worth a visit.