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Misys makes a match

If it is not a marriage made in heaven, the acquisition of DBS and its

Assureweb subsidiary by Misys must be a marriage made in cyberspace.

Clearly, there is a wide range of issues that need to be addressed when

considering if the takeover in its entirety is a good thing, but from a

pure technologyperspective it has much to commend it.

Bringing together the two main competitors to the dominant position of

Exchange FS as the main provider of online services to IFAs will be no

small benefit to product providers&#39 IT departments struggling to meet the

needs of so many competing portals.

Some fascinating market dynamics are playing out in portal space. With a

target market of over 7,000 “in-house” advisers, the combined

Assureweb/m-link business should have the capability to consolidate its

position as the second-biggest portal simply by capturing the majority of

the registered individuals associated with its parent company.

Much is made at present of the number of registered users that one or

other of the portals may have but there is little information on who

advisers use for their primary portal relationship.

When it comes to getting illustrations, from a practical perspective, I

would expect the Exchange to be the portal of choice for most advisers as

it still has a far bigger number of products and providers on its service.

But in recent months there have been clear signs that Assureweb has been

catching up.

While the Exchange has a clear advantage in the quotation area, there are

many other elements involved in providing an IFA with online services.

Online commission services is an area where Assureweb is ahead of the

Exchange and, when it comes to online new business, the two companies&#39

capabilities are far more closely matched.

As far as delivering websites to IFAs, Assureweb has a couple of thousand

using its free IFA Window sites with several hundred opting for more

advan-ced paid-for sites.

The Exchange is known to be considerably increasing the scope of its

offering. The Office Web platform it is developing, acquired as a result of

its acquisition of Crisp Computing late last year, will enable it to

position itself right at the heart of an IFA&#39s operation. The system is in

development so it is too early to predict its success or otherwise, but

what I have seen looks promising.

I see it as inevitable at some stage the Exchange will lose some of its

customer base, especially among the 7,000 advisers that are known to be “in

house” to Misys but I would expect it to replace such revenue by delivering

a wider range of complex services to power the advisers&#39 own systems and

its clientfacing websites.

Ultimately, provided it can make it attractive enough, the natural IT

partner for a network member must be its network&#39s chosen solution, given

the synergies that can be delivered via such unions. On the other hand,

many IFAs have a love-hate relationship with their networks and a desire to

maintain independence in all other ways that they can.

Although this takeover creates a very powerful competitor for the Exchange

it must gre-atly increase the importance of the Exchange to insurers, given

the emergence of the combined Assureweb/m-link business it becomes

essential there is a strong healthy competitor available. Without a healthy

and viable Exchange business, the impact of this takeover on product

providers&#39 ability to distribute electronically would be devastating.

It is also important not to ignore the role of other players such as

Synaptic Systems and Bankhall&#39s IFA Engine. I have long said that if I were

still practising as an IFA, the former&#39s system would be the one that I

would choose to use myself.

Having recently seen some of the developments it is due to release

shortly, I continue to have a great respect for its work. IFA Engine tells

me it will be putting more of its service live very shortly and this will

be interesting to see. These organisations, too, have an important role to

play in maintaining a competitive market. While a strong Exchange is

essential to compete with the merged network-owned technology platform, the

prospect of a powerful duopoly should hold little attraction either – there

must be a range of service providers to encourage real competition.

One thing I hope will be lost in the merger of Assure-web and m-link is

the concept of everything being free to IFAs. I believeit is undermining

the extent of resources that can be allocated to IFA software and the

quality of solutions being delivered.

In my view, a movement towards paying a more realistic price for the

technology they use would lead to a higher quality of solutions being

delivered. After all, if you are paying nothing, or virtually nothing, for

your software do you really have a right to complain if it is not that good?

This is, of course, a legacy of the “life company pays” attitude of the

pre-FSA era, combined with an element “of everything is free on the

internet”. The truth, however, is that those days are long gone, even the

mighty Microsoft has recently admitted that it is not viable to run web

services purely on advertising sales.

If IFAs really want to have everything delivered to them for free perhaps

they should be looking to move into a multi-tie environment where it is

likely to be more acceptable for providers to provide highly sophisticated

support services.

Although recent research shows that the vast majority of advisers are

fiercely resistant to the concept of moving to multi-ties, if the powers

that be decide that some element of depolarisation could be in the

interests of consumers, I bel-ieve they may find that such an environment

might have major benefits for themselves and their clients.

Technology is like everything else in life – you get what you pay for.

Consolidation in the portal market is a good thing. It will enable a small

number of players to achieve critical mass and deliver quality solutions at

affordable prices although I would expect this to cost rather more than the

levels currently being paid by advisers.

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