IFAs are awaiting the arrival of interactive digital TV channels dedicated to intermediaries but say the key to success will be a low-cost and high-quality service.
BSkyB and rival Invest TV are spending millions developing initiatives, the Financial Channel and the Simply Money Professional channel respectively, which they say aim to revolutionise the UK financial service market.
The ventures will both offer product providers a platform to communicate with IFAs, provide news, analysis, a discussion forum for advisers and interactive continuing professional development.
IFAs welcome the move but the feeling is this service will only succeed if it brings something new as the market is becoming flooded with information resources.
Millbrae Financial Services managing director Carl Melvin says: “It would have to provide something different as there is now an increasing amount of information available through other media, especially the internet, and this service would have to offer something tangible for IFAs to want to put their hands in their pockets.”
IFAs also want answers to the costs involved. Aside from buying equipment to access digital television, IFAs want to know whether they or product providers will be funding the projects.
At present, neither company has set any plans in stone for funding. BSkyB is consulting providers before making a decision but it could involve IFAs and other viewers paying a subscription or providers footing the bill through advertising and other deals. Alternatively, BSkyB may operate a pay-per-view system for meetings specifically geared to national IFAs, networks, direct-sales or bank staff.
Invest TV, however, is not looking to providers to pay for the service. It expects to generate a greater propor tion of the revenue through IFA subscriptions.
Managing director Ed Hall says people who have digital televisions are used to paying for the service but it is those not subscribing already that are hostile to the idea of paying for it. However, he feels subscriptions are important.
He says: “IFAs are bombarded with a lot of paperwork and a lot of money is spent on that by the providers. This needs to be seen as something different to that, seen as their channel, not the product providers' channel. This gives more added value to the IFA and the subscription model is part of that.
“Product information is only a small part of the service. Research data, background information, regulation information and training, these are all things IFAs pay for already.”
So, will IFAs pay for this service? It is easy to assume they would prefer the service to be paid for by providers but the concept of impartiality is very close to IFAs' hearts. Choosing to have digital television will be a business decision and it is more a question of whether the venture will add value to the business than just being a cost issue.
One of the main areas where digital television could bring value for IFAs is training and the opportunity to earn CPD points through interactive viewing and testing.
Maddison Monetary Management managing director Mark Howard says anything proactive about the education of IFAs is positive and IFAs should bear that in mind when considering subscription fees.
He says: “The facilities of digital television will attract people to the medium but I do not think there is a need for product providers to sponsor this service. IFAs have to take responsibility for the future of their education.”
Digital television will allow IFAs to move away from computer-based CPD. Advisers may be able to earn points by automatically logging their viewing, taking part in interactive panel discussions or by using their remote control to select multiple-choice test questions. This means IFAs can submit their CPD tests immediately after watching a programme and should mean they receive certificates quicker if these can be issued online.
Scottish Equitable IFA training manager and Sofa chairman Peter Williams welcomes this use of online testing.
He says the Chartered Institute of Insurers is looking at online exams and says obtaining CPD points using digital television is the next stage. Williams says it could also be used to develop in-house training. “IFAs can watch a programme together and then have a group discussion of how it affects or could benefit their business. It can be used as part of further business development rather than a stand-alone event,” he says.
The idea that these channels can reach a greater market will not only make it a cost-efficient initiative but could also be time-efficient. Providers are increasingly using the roadshow format as a way of marketing and educating IFAs and to date it has proved very successful.
Transmitting roadshows has obvious benefits for providers and IFAs. Pro viders can save time and money not having to make presentations around the country and IFAs benefit in not being taken away from meeting clients and generating business.
PMI Independent Adviser partner John Stewart believes it is a definite move forward. He says instead of only one member of staff visiting the roadshow, firms can have a group watching it together or it could be taped to store as information for future training.
However, it is too early to say whether digital television will replace roadshows. The interactive element may allow advisers to ask questions but will they be able to feed off the issues raised by their peers? Digital television might be an effective method of building up CPD points but it runs the risk of IFA firms not interacting with their counterparts.
The continual development of communication is providing endless opportunities for IFAs but this in turn gives them endless options for how they choose to communicate. Not all these ventures can succeed, as has been highlighted by the failure of numerous dotcoms. The key to success for
digital TV has to be pitching the service at the right level.