The end of the year is the traditional time to review what has happened in the past 12 months and look forward to what might come in the next. All too often, as far as IFA technology is concerned, it has been a case of looking back on a year when things were not achieved and forward to another year which will probably not deliver what it should.
However, I am pleased to say that 2003 has been a year of achievement in many areas of technology and 2004 has all the signs of a year when every IFA can benefit from e-commerce. It is in the hand of IFAs to decide how much.
To begin my summary, let us start with the mortgage industry, which is certainly facing challenges in 2004 with the onset of regulation.
This year has seen the delivery of the long-awaited Mortgage Trading Exchange platform, allowing the electronic submission of applications to lenders. The service went live on August 4 and by September 10 was able to report that over Â£100m of applications had been submitted.
Electronic applications via MTE now exceed Â£250m. At the beginning of December, no fewer than eight lenders were able to accept applications or provide agreement in principle via the system, with a further 10 in progress. It is available to users of Mortgage Brain, Mortgage 2000 and The Mortgage Organisation, allowing access to the system to no fewer than 30,000 mortgage advisers.
In September, Mortgage Brain announced a strategic partnership with The Exchange, which meant The Exchange's Mortgage Centre became powered by MBL and 18,000 Exweb users were given access to MTE. This deal is in addition to existing integration between MBL and AssureWeb for Sesame members. This gives the new trading exchange a clear critical mass from the distributor perspective.
Equally important about MTE's progress is the fact that the lenders represented on the platform comprise most of the key players in the market. Sadly, Abbey is still conspicuous in its absence from this platform but MTE's clear market-leading position must be creating a compelling argument to address this omission.
The fund management industry has also had an exceptional year for e-commerce. At the peak of the Isa season, fund supermarkets were attracting almost one in two of all Isa sales by IFAs. In addition, some excellent technology offerings from Cofunds and Fidelity have enabled an increasing number of advisers to re-register assets from individual managers to the supermarkets, enabling increased levels of service and aggregation for the clients.
Not to be outdone, EMX, an organisation that has faced significant challenges in the past, has become a real success story in the last 12 months. It now carries significant volumes of both trades and valuations between fund managers and advisers, thus delivering very real economies.
Recent research carried out by my own organisation among members of Adviser Forum, which now includes the majority of the UK's main IFA businesses, identified those fund providers that the major advisers consider crucial to achieve critical mass for electronic trading. By far the majority of those considered essential by advisers are using EMX and it is clear to me that any fund manager that is still not on the platform is inflicting significant damage to their own potential market share by its absence.
No summary of e-commerce achievements in 2003 would be complete without some mention of Positive Solutions. Another outstanding success at the Money Marketing Awards back in March, it has continued to develop its proposition. The way in which the company has given providers access to its own member extranet in order to accelerate new business processing is truly market leading. I cannot help but think that if all IFA businesses operated this way, we would cut a massive chunk out of industry operating costs.
From a personal perspective, the most satisfying development in 2003 has been the way in which the adviser community has taken control of the e-commerce agenda, with no fewer than 13 IFA businesses meeting monthly to agree a common agenda to reduce costs across the industry and improve customer service.
While I admit to vested interest as one of those driving forward the Forum, I believe you need only look at the market presence of participating advisers, including Bankhall, Barclays IFA, Berkeley Berry Birch, Inter-Alliance, Positive Solutions, Royal Bank of Scotland, Sesame, Sifa and Towry Law, to recognise the Forum's importance.
Last, I must turn to the life and pension providers. What has been their contribution to e-commerce in the last year? The answer is substantial in the protection market, where offices such as Legal & General and Friends Provident are increasingly making e-commerce the standard way to submit new applications. As I mentioned two weeks ago, an increasing number of providers are now also able to share group scheme data back to IFAs to populate their own systems, causing major savings for advisers.
One of the most time-consuming activities for any adviser is obtaining information on a client's existing contracts before carrying out a client review. As one major firm pointed out to me last week, it can take as long to assemble the client's valuations as you actually spend in front of the client discussing their requirements.
At last, help is at hand for the adviser as no fewer than eight life and pension providers are now able to deliver electronic real-time valuation messages using the Origo standard messages.
A further four offices have such services scheduled for implementation next year. Increasingly, these services will be able to access such information straight from the adviser's own client management system rather than just over an extranet. This is a major benefit for the adviser.
Our own research, again with members of Adviser Forum, identified that the savings achievable by advisers could amount to nearly Â£2,000 for every registered individual in the market. The prospect of such savings becoming a reality for every IFA next year should make for a Merry Christmas for one and all and definitely a Prosperous New Year.