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
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's 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
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
Information can be imp^_orted from an employer's 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's 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's 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's
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
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
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's 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: IanMcKenna@MSN.com
Tel: 0207-359 5656
Fax: 0207-359 2858