While the industrywide electronic new business initiative struggles to reach anything like acceptable levels of usage, there are a small but significant number of life offices which are attracting electronic new business over their websites.
Prudential is an excellent case in point, having recently announced that it has now received over Â£100m in investment into with-profits bonds over the internet via IFAs since the www.pruifa.co.uk service was launched in July 2000.
The service is currently attracting new investment of around a Â£1m a day, making a significant contribution to Prudential's long-established position as the market leader for this type of contract. I understand from Prudential that the bulk of this is from a handful of national IFA firms.
Last week the PruIFA benefited from a substantial revamp – based on user feedback – to make it even more user-friendly. Consequently, this is a good time to look at what that handful of national IFAs seem to have discovered that other advisers could also benefit from.
Prudential has now tried to make the site as similar as possible in its layout and navigation to that operated for its Scottish Amicable brand. From my discussions with IFAs it is clear that the diversity of designs used by the various life office extranets is a considerable barrier to their use as it increases the training overhead for advisers.
I am in no doubt that if all life offices moved to a consistent look and feel across their IFA extranets they would be rewarded with a significant increase in usage.
In the meantime, the fact that two related organisations are moving to a common look and feel is a start, even if it is a little undermined by the announcement of the demise of the Scottish Amicable brand. The service is accessed using the same digital certificates used to access the Scottish Amicable service.
The natural place to begin is the training area. It is encouraging to see another life office recognise the importance of letting advisers get a proper feel for their online services before expecting them to start transacting live business for clients. More providers could learn from this approach.
If any errors are detected by the validation process a pop-up window appears to identify the problem. A good level of help text is included in a separate window and first-time users may find it convenient to keep this open on their toolbar while getting to know the system.
Going through the training process produces a full keyfeatures document following whatever investment options you selected for your test case.
Having created an illustration, the service will then allow you to convert this to new business. Alternatively, all quotes are retained on the service for a six-month period for advisers to go back to them and convert the illustration to business.
The new business process reinstates the data included in the original illustration with all the information already input during the application process being carried forward.
The additional information is then entered – normally just the client address and completing the money-laundering questions – before proceeding to the payment section.
Payment can be made by cheque or debit card for amounts up to Â£100,000 or by electronic transfer. If a cheque payment is made. you can then print the industry-standard declaration which is used in place of a signature.
I am encouraged that Prudential has used the agreed standard format rather than trying to amend this, as some life companies have done.
This declaration is signed by the client and the adviser sends this, together with a payment form, to Prudential, who will tie it up with the electronic record that has been created online. A similar process is followed for transfers where an authority to the client's bank to make a transfer is printed.
Where the client opts to pay by debit card the process is even easier. The system generates a statement by which the IFA confirms they have authority on behalf of the client to operate the debit card payment service. This is done by clicking an “I agree” button. The adviser enters the client's debit card details and this is used as the instruction to set up the contract.
As with the industry new business process, trust-based cases cannot yet be submitted online because of the need for physical signatures on trust documents and the importance of the timing of their receipt.
The Prudential service identified this at the beginning of the new business process and repeats the point, needing a mouse click to acknowledge the warning as you are about to complete the case.
Given that the vast majority of the information is already held in the system from the time the illustration was produced, it is easy to see why some firms have adopted this as the standard way to submit business to Prudential where cases are eligible.
In addition to the new business service, the site will allow advisers to access details of all existing PruBond cases via its agency. This includes details of current values, with and without terminal bonus, the original premium, amount and frequency of withdrawals including the date of last withdrawal, the funds investments are held in and the prices for each of these funds.
The site is also already able to accommodate downloads of policy data using XML, ready for the increasing number of IFA back-office system providers which are currently developing this functionality for their IFA clients. This downloadable valuation service will prove to be very popular with IFAs when back-office system providers can adopt it.
The PruBond new business service is also available for illustrations via Exchange, AssureWeb and Bankhall's IFA Enginem with the new business element already operating over the Exchange now and due to be added to AssureWeb and Bankhall in January. Illustrations should also be available via Webline from January.
Ian McKenna is a consultant and director of the Financial Technology Research Centre, which works for a wide range of industry organisations, life offices and technology companies, including Microsoft, Assuresoft and The Exchange. He can be contacted by email at firstname.lastname@example.org Tel: 020 7935 2599