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Playing it Smart

The question I am asked more often than any other is, what makes a good

technology-based initiative? To my mind, there are a handful of questions

that largely decide the right initiative. If affirmative answers can be

given to these, it means that the developers have something to be proud of.

Although desirable overall, the latest technology toys or other fashions

have no place on this list. The main priority for any such service must be

that it saves the target audience time and money.

If it does, it has gone a long way to justifying its development. Linked

to this question would be the extent to which it is being used in the

market. If it is used to a high extent, then the service is probably

delivering major benefits to
the market.

When implementing any new technology, it is essential that it is serving

the business process and not the other way around. All too often, I come

across situations where people are proposing changes in the way people work

to accommodate new systems without identifying what the benefits will be

for the users.

Not surprisingly, such services encounter resistance and generate

resentment. The overall effect is that, even if a system is doing a good

job, it will not be popular with its users. If the only reason that you

cannot do something you used to be able to do is because a new system will

not let you, the system designer should be called to account.

Scottish Equitable would probably not be high on most people&#39s list of

pioneers. Its SmartScheme
service, however, which is

now used in nearly 90 per
cent of all group personal pensions being

set up by the company, seems to more than
satisfy the key success

criteria set out above.

Launched in September 1998, it has so far been adop^_ted for use by more

than 2,100 schemes covering arrangements from a typical 20 employees to

those with as many as 800 members. In total, these account for 49,000

ual policies.

SmartScheme is not an
online service as such, more a collection of

tolls designed to make administration of group schemes easier. SmartStart

is designed to automate the collection of information to set
up a


Information can be imp^_orted from an employer&#39s payroll software and any

other source of data that may be available. Scottish Equitable has a

dedicated support team to deal with this.

SmartSign-Up then uses this data to generate all the necessary key

features and documents, prepopulates appli-
cation forms and creates an

evidence of earnings schedule.

SmartSet-Up helps with
the creation of Scottish Equitable&#39s own

records once it has taken on the case.

SmartData allows the option to share any data received with the IFA,

including the ability to copy scheme and membership information into the

advi^_ser&#39s own back-office system.

This is achieved using the Origo bulk data download standard, so it should

be possible for any software house to create an automatic import fac^_ility

for their IFA customers.

Having established the scheme, SmartPay allows the collection and updating

of contribution information via a variety of formats, including disk,

email, spreadsheet and direct from payroll as well as the payment of


To allow IFAs to keep up to date with the latest information on any

scheme, the SmartView service allows direct access to Scottish Equitable&#39s

mainframe records in Edinburgh.

This is currently based on the group enquiry system via The Exchange.

However, an alternative direct extranet
facility will be added during

the summer.

Finally SmartStatement allows for benefit information to be delivered

electronically so that it can be personalised and aggregated with any other

employee benefit information.

One IFA who has found the service particularly useful is Jeremy Spencer of

London firm James Hallam. His firm uses the service for an increasing

number of schemes and has even moved its own company pension to


Spencer says: “We are finding the service works well. One very active

scheme we administer can see between 10-30 new entrants a month. With

scheme of that size, it is inevitable that something will go wrong.

However, they seem to be able to sort things out very quickly using this


“Taking the information straight out of the payroll system also helps with

this as it reduces the errors that can be caused by dates of birth,

Nat^_ional Insurance numbers and spellings of names. This has been

particularly useful rec^_ently in broking a scheme for an international


SmartScheme is, in fact, more a series of ad hoc technology facilities

that can be put in place to help IFAs of all types and sizes rather than a

streamlined service. This means that individual firms can choose as many or

as few of the services as they want to use and build on them as they become

more experienced with the systems.

Figures from Scottish Equitable show that, on a scheme with 20 lives and

five addit^_ional joiners a year, SmartScheme should save the adviser 16

staff hours establishing the scheme and a further 31 hours a year on an

ongoing basis.

For a scheme with 200 mem^_bers and 50 joiners a year, it should save 154

staff hours in set-up and a further 68 hours each year thereafter.

No doubt, after some initial set-up costs, the company is also achieving

considerable economies internally through the use of these tools. This is

good news, with the ever inc^_reasing pressure to drive down costs. With

the advent of stakeholder and the increasing pressure on margins, anything

that can deliver this sort of time saving to IFAs must be welcome.

What I find most encouraging about the service is the high percentage of

new business that it is now using it. It is frequently suggested that

IFAs do not want to use new technology. Scottish Equitable&#39s success

suggests that IFAs will use new technology if they are given software that

will really help them.

Conversely, providers which set up services designed to help themselves

rather than the adviser are likely to be ignored. I can think of many

organisations in the market which would do well to learn this lesson.

Ian McKenna is a consultant and director of The Financial Technol^_ogy

Centre. He can be contacted by email at:

Tel: 0207-359 5656

Fax: 0207-359 2858


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