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Mortgage IFAs grasping the internet nettle

Considering the amount of time and money that is spent by a wide number of organisations designing and delivering technology aimed at persuading IFAs to use e-commerce, I am amazed at the lack of hard research on what advisers really want from such tools.

I was delighted then, when, late last year, IFonline commissioned the Financial Technology Research Centre to conduct a detailed survey into the e-commerce plans of mortgage advisers. The results are published this week and I believe will deliver some fascinating messages.

In planning the survey, a deliberate decision was taken that it would be conducted online. This research was about finding out what those advisers who are prepared to embrace technology wanted. If, at the beginning of the 21st century, there are still advisers who have not recognised the way the world is changing, it must be questionable if they are worth worrying about.

Overall, this research gives a strong indication that the mortgage adviser community is in fact embracing e-commerce and already believes it is receiving real benefits for doing so.

There is a fairly widely held belief among product providers that IFAs have offices full of ancient PCs operating with prehistoric software. This survey shows that, in fact, this is far from the case.

Seventy-six per cent of respondents were using Internet Explorer 5.0 or 5.5 and 74 per cent were using either Windows 98, 2000 or ME. It would also appear that there is only a very limited case for developers bothering to include Netscape compatibility, as only four per cent of respondents use it.

PC hardware specifications were equally impressive. Forty-two per cent have PCs with a 400 MHz processor or better, and 42 per cent have 64Mb or more of memory.

Equally, while dial-up modems remain the main method of accessing the internet at 68 per cent, 28 per cent have ISDN access. A smaller number use ADSL, even though it had only become available a couple of months before the survey period – and even then only in limited areas. Advisers are also increasingly confident about their own computer skills, with 80 per cent considering themselves at least moderately skilled users.

Turning to what benefits IFAs are looking for from e-commerce the highest demand – from 75 per cent of all respondents – was for clients to be able to leave a meeting with a formal agreement in principle that had passed the lender&#39s credit score.

Significantly, a similar 75 per cent indicated they would prefer to process mortgage applications on-line during the last 12 months. The demand for the ability to check progress of applications online would appear overwhelming, with no less than 94 per cent of respondents saying they would like such facilities.

The support for using portals to access this information was similarly strong, with 91 per cent stating they would want to access mortgage information via a portal.

This should send a strong message to lenders like the Halifax and Abbey who are seeking to make IFAs deal over their extranet, missing completely the point that mortgage advisers want to deal with the whole mortgage market, rather than just one or two lenders. The phrase &#39time to wake up and smell the coffee&#39 comes to mind!

Another interesting conclusion was that 69 per cent of advisers wanted lenders to proactively deliver information to them on the progress of cases, with the vast majority of these (69 per cent) asking for delivery of these updates by e-mail. But only 42 per cent of respondents were happy for lenders to provide applicants with information directly.

We got some interesting results when examining what advisers feel about having a good working relationship with the solicitor acting for the client. Sixty-eight per cent of advisers said that persuading the client to use a solicitor they knew would increase the chance of the loan completing.

Many solicitors find IFAs a valuable source of such referrals, but further examination suggests that the days of such arrangements may be coming to an end.

Eighty-one per cent of respondents said they would use a conveyancing service that would allow them to access information on the progress of the legal aspects of an application online.

And 63 per cent of those indicated they would use such a service in preference to their own local contacts.

It bodes well that IFonline has just launched a service to allow its users to instruct solicitors as part of the online mortgage application process. Ninety per cent of the information to instruct the solicitor is pre-populated from the mortgage application.

The information is then transmitted electronically to one of the 250 firms of solicitors who are part of the legal marketing services, who then undertake to write to the client and contact the adviser within 48 hours.

The next stage will be that the adviser will be able to track the progress of the application via IFonline.

Six per cent of respondents said that they were already giving mortgage advice over the internet, with 46 per cent expecting that in the next 12 months the internet would create new enquiries for them. Overall, 91 per cent of advisers felt e-commerce was already benefiting their business, with 96 per cent believing it would do so within three years.

Accepting that the nature of the survey means those completing it would be the more e-commerce aware, it is a welcome sign that there is a group of advisers who have the technology and feel that their embracing of the new economy is delivering and making a positive contribution to their business.

While admitting self-interest, having drafted the survey in the first place, I have to say that I found the results fascinating. Remember that these are the results of a survey of mortgage advisers. A similar survey of the wider IFA market would provide some invaluable insight.

More details of the survey can be found at www.financial-technology.net/mortgageadvisersurvey.html

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