Impartial, independent professional advice is not cheap and one of the often-discussed contributory factors in this cost is that of regulation. The Financial Services Compensation Scheme interim levy bills are a good example of regulatory costs pressures. Adviser firms have little choice but to find a, hopefully, palatable way to pass this on to the consumer.
But there is a cost that constantly bubbles along causing deterioration in service from the adviser to the client and adding a substantial extra amount to the calculation of client fees. It is called “poor provider administration”.
It has been around for as long as I can remember and I see few, if any, signs it will improve anytime soon. For a while there was some hope that new technology was going to improve things. At the touch of a button we would be able to access the information we needed about our client’s pension and investment arrangements. This would enable us to deliver more timely advice and a better client experience.
The sad reality is that the difference between modern client centric platforms and the service that can be expected from legacy business models makes things appear even more stark. How can it take days (sometimes even weeks) for the production of a plan valuation? Even more worryingly, how can the act of sending a required document take so long when, in reality, attaching it to an email ought to take no more than a few seconds?
If we could strip out poor product provider service I am confident that the turnaround time for advice delivery could be reduced by at least two, possibly as much as four, working weeks. I could provide a better service to my client and from a commercial perspective get paid a lot quicker as well.
My concern is that poor administration can be viral. There is a real risk that many of the modern platforms are going to be infected by the virus of poor provider administration. Whenever manual and automated processes touch each other this virus seems to be passed on.
My major concern, though, is that slow service seems to be becoming the norm rather than the exception. The worst culprits are well known and do not need to be “outed” here. However, I have a simple message for the senior people of organisations who have staff passing on messages such as “our current turnaround time is 15 days” or “our agreed service levels are six days”.
My first point is that if your turnaround time for administration is 15 days what you are actually saying is that you “really couldn’t care about your clients”. You are not honest enough to say so.
If you try to play the “agreed service level” card then I have to simply say “you did not agree poor service with me before you asked for my clients business”. The cost of poor provider administration is truly shocking.
Nick Bamford is executive director at Informed Choice