View more on these topics

Tools for a service call

Identifying ways that as an industry we can deliver advice to those who cannot afford to pay for it must represent both the greatest challenge and the greatest opportunity for our industry.

There is much valuable work going on to look at how a structure might be put in place to achieve this economically. Both the Thoresen review and the primary advice stream of the retail distribution review are looking closely at this subject.

Inevitably, solutions to this dilemma are going to need to involve an element of self-driven involvement from consumers. Digital communications channels must be the natural delivery for most, if not all, such services.

The key to this issue is how you make informed guidance available to consumers to help them reach decisions on their own when they can but make professional support and advice available once they need it.

I recently got to look at what some tools might make some of these highly desirable objectives a reality. The natural place to look for leading-edge adoption of digital channels is America and if one US investment firm has made a name for itself with its technology it has to be Fidelity.

Over the last six years, the company has developed a powerful range of tools enabling it to deal with its American customers more effectively. These are presently being adapted to meet the legislative and regulatory requirements in a number of other countries and the UK will be one of the first three areas to benefit when they become available here next summer.

Last October, I looked at how Funds Network is using its direct-to-consumer Sipp product to develop a referral channel so that customers who need more detailed advice can be directed to suitably authorised advisers.

The launch of a further generation of powerful analysis tools to consumers presents an obvious opportunity to guide even more consumers towards professional advice.

For some time now, the FundsNetwork site has offered a “my Plan” retirement planning tool. It is one of the easiest and most simple to use calculators I have ever seen. It conveys important messages about retirement planning and guidance of the amounts involved based on a client’s circumstance in simple ways that that even the most financially unsophisticated client should be able to follow.

These have recently been supplemented by a further set of profiling tools that enable advisers to help clients in conveying concepts on retirement planning, education, tangible assets and gifting as well as inheritance planning.

The next evolution of these services will be the UK versions of the tools already on offer in the States. These allow clients to build up detailed financial plans online and produce powerful analysis of their financial requirements.

These tools include the ability or people to understand their likely income in retirement and the extent to which this will meet their needs. Users can also track the performance of their assets over time and examine their exposure to risk.

Within these tools, they can make provision for regular income needs, the extent of emergency provision, their level of regular expenses and issues over attitude to risk.

One positive effect that Fidelity has experienced in the US is that when clients are left to themselves to enter details of their financial arrangements online and use modelling, they are far more likely to disclose additional investments that they may not previously have disclosed to their advisers.

The depth of analysis possible with the US tools is on a par with some of the best analysis software delivered to IFAs by client management systems. Obviously, there are benefits to advisers sourcing software from independent suppliers. However, by rolling out these tools to advisers and consumers, FundsNetwork is clearly going to raise the bar in terms of what an adviser will look for from their own software providers if the adviser is going to be paying the licence fee.

These tools should help advisers spend more time with clients more profitably. The consumers will have been able to spend time themselves modelling likely scenarios and solutions so it is reasonable to expect that they will have a greater understanding of the complexity of these issues and be more appreciative of the assistance they receive.

I have long believed that many IFAs make life too easy for their clients, so much so that the client does not recognise quite how much the adviser does for them. The adviser giving the consumer the ability to model some of these issues themselves should help address this.

It is clear to me that in making these tools available to advisers and consumers FundsNetwork sees its customer referral strategy as a key component of their distribution plans. The news that David Dalton Brown, executive director of FundsNetwork, who has championed the adviser referral process has now been give responsibility for the direct business as well as for the platform itself must be seen as a positive development.

Allowing customers to engage with the planning and analysis process themselves should make it far easier for advisers to be able to operate over a range of channels. If time and money are not an issue, it might be attractive to sit down in a face to face environment with every client but for those with limited holdings and little to spend meeting in traditional ways, it would simply be uneconomic.

Phone-based advice, where the adviser and client can both be looking at the same online analysis service, presents a far lower-cost alternative and in many cases may make the relationship economically viable for the adviser and the client in situations where face to face advice would have meant the consumer was paying more for advice than they can afford or the adviser is subsidising the cost of the work.

The availability of powerful planning tools that can be operated remotely might, linked with a phone-based service, have the potential to provide an alternative to jettisoning less profitable customers.

In the brave new world where everyone is focused on profit and value, our industry is going to need innovative solutions to deliver quality products to consumers at prices they can afford. Services such as those being developed by FundsNetwork for the UK present practical ways in which this can be achieved. I am really looking forward to seeing what other providers come up with to help advisers build their businesses.


Regulation plea for all loan business

Premier Mortgage Service managing director John Malone is calling on the Government to regulate the secured loan market and all other unregulated parts of the mortgage industry.The call comes in response to Black and White’s recent decision to withdraw from the regulated mortgage market to concentrate on unregulated areas such as secured loans, commercial loans, […]

Bank trio offer to securitise half of Northern Rock’s loan

Royal Bank of Scotland, Barclays and Citigroup have offered to securitise £12.5bn of the Bank of England’s emergency loan to Northern Rock.According to reports, the three banks have approached the Treasury in the past few days offering to securitise half of Northern Rock’s BoE loan. Their plan is designed as an alternative to a scheme […]

Pressing engagement

Maintaining consumer confidence is pivotal to the success of any industry so it is extremely important to find answers to questions such as how to ensure consumers believe in the industry enough to buy the product and how to reassure them that what they are buying will be there when they need it most.

Godiva Mortgages announces equity release partners

Godiva Mortgages has confirmed its selected intermediary partners for its launch into the equity release market on February 28.The panel will initially include intermediaries Age Partnership, Equity Advice, Equity Release Solutions, Helen Brown Financial Services, Home & Capital, Key Retirement Solutions and NHFA. Managing director Colin Franklin says: “We are very pleased to be able […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm