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Right on track

A couple of weeks ago, I wrote about two services that can offer major benefits to advisers as they prepare for the RDR. Here, I want to look at a service that has been promised for years and in which several organisations have made significant investments but is yet to deliver the value it can certainly offer.

From a product provider or platform operator perspective, this can be a valuable way of improving service to advisers. For advisers, it can significantly reduce the administrative burden of establishing new client arrangements. I am, of course, referring to application tracking.

Tracking can also establish the basis for future electronic services and, implemented correctly, it can supply the policy or contract number for future valuation services as well as the commission expectation for account reconciliation. As such, it should be a key part of establishing an electronic servicing relationship.

Unlike other services such as contract enquiry, where there needed to be widespread market adoption before advisers could start seeing savings to the cost of valuing and aggregating client portfolios, tracking is a service where individual providers can achieve a real commercial advantage over their peers by offering a service that supplies all the information an adviser wants, how and when they want it, while other providers offer only limited information.

Tracking can be implemented in a number of ways. In its simplest form, the provider can make information available from their extranet. Some of the best examples of this approach have involved the provider making their own workflow system accessible to the adviser. Legal & General comes to mind in this regard.

It is, however, far more valuable if the information can be delivered straight to the adviser’s client management system, this being the administration hub from which they will manage their client relationships.

Advisers have been asking for tracking for years but until now the capacity to deliver it did not exist

Both The Exchange and AssureWeb have carried out considerable work with a number of life offices, including Axa, Friends Provident and L&G, to enable the delivery of electronic tracking messages but I have yet to see any of the major client management systems embrace this opportunity.

Given the administration economies they can offer to advisers, this seems strange. Some software suppliers say there is no demand from advisers for tracking, my response is look at the adoption of contract enquiry – a few years ago, message volumes were in tens of thousands, now they are measured in millions.

Advisers have been asking for tracking for years but until now the capacity to deliver it did not exist. Contract enquiry became something of an arms race between the major client management systems as to who could get more providers on board quicker.

I believe there is a strong case for content management system providers to become equally competitive over picking up these valuable services from the portals and I am keen to see which CMS will be the first to come and show me a working service.

It is sometimes assumed that these services can only help in the protection market but tracking can be a valuable service for any product area where the contract establishment is extended beyond simple completion of the necessary documentation. Annuities, pension consolidation, Isa transfer and wrap account establishment or transfer are just a few of the obvious candidates.

I have recently been involved in a number of studies to identify what really makes an attractive tracking service for adviser firms over a range of product types. The IFA market is a heterogeneous community. Different firms work in different ways and it is important to understand what needs to be done to service the various operating models.

If not constructed correctly, a tracking service can cause the level of inbound progress calls to explode but this can be avoided if the right steps are taken.

To build an outstanding tracking service, providers need to go the extra mile and include a number of essential items normally overlooked but, for those that do so, I believe the prize, defined substantially in new business terms, could be considerable.

From an RDR perspective, benefits included recognising the considerable downward pressure on cost, especially hidden administration costs the client will not see in the new world; from an adviser perspective, there is an argument for seeking out those providers which offer a comprehensive tracking service. There is certainly a strong case for saying to clients that the adviser will have to charge more for establishing a plan with a provider that does not have a highly automated tracking system compared with ones that do.

From conversations I am having regularly with major advice firms, service providers and networks, it is clear this will loom large on the list of requirements for any restricted advice arrangements. In some product classes, the lack of such facilities could well be a reason for deselection.

A great tracking service is not going to make an adviser recommend an uncompetitive product or one with poor features but for those organisations that offer competitive quality products it can be the factor that makes an adviser or paraplanner decide to place business with a particular company because they will be easy to deal with, which in turn delivers a better customer experience.

Those life offices, platforms and client management systems who get the correct tracking services in place are putting themselves in a far stronger position to cut costs and offer exceptional service to advisers. That sounds to me like the core requirements for a compelling business case.

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