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Why price is right for IFA software

An interesting debate broke out recently on the FinservUK Ecom list. It appeared to be prompted by the charges being introduced for DBS members by AssureWeb for the use of the Consultant software that replaced the previous System 5 a couple of years ago.

While I have no desire to get dragged into the general discussion on the way that charges are being increased on various different networks, I do feel qualified to make some observations when it comes to technology issues.

Probably the most frequent criticisms I hear from smaller IFAs is that IFA software is too complicated or too expensive. I am sure if I suggested that giving financial advice was a simple thing, quite rightly, Money Marketing&#39s letters pages would be deluged with complaints from readers pointing out how complex the process can be. I agree. But does it not then follow that the necessary technology to support IFAs must, by its very nature, be complex?

By this, I do not mean complex in the way it is used, as most modern systems follow the basic Windows/Microsoft Office styles, but in the processes it has to follow to meet the various statutory and regulatory requirements imposed upon IFAs. This is not the fault of the software providers but is a reality of the way that IFAs have to work to meet their professional obligations.

When discussing this issue, there are two other points to take into account. The first is to recognise that, if you put any new technology into a business, there is going to be a period of time when it will create more work than it will save. Specifically, this is the time when you are loading all your client information on to it. However once this information is loaded, the benefits are that you only have to update the information that has changed and can reuse that data in many ways.

Ann-Marie Martyn of My Money Adviser has been writing some excellent articles recently in Money Marketing exploring the extent to which such savings are achievable in more detail, so I will not go into depth here other than to give the simplest of examples.

Which takes longer to complete – a fresh fact-find every six months or updating a pre-printed version of all the data confirmed in the last fact-find? This does not in any way diminish the ability to use the fact-find process to identify additional financial planning opportunities. It does, however, cut down on repeat paperwork. If you have not already read Ann-Marie Martyn&#39s articles they can be viewed at the Money Marketing website at

The next issue I cannot raise often enough – training. The simple truth is that complex software systems able to manage large amounts of data are not likely to be something you are going to be able to pick up and learn intuitively. Even if you can, the learning process (and consequent level of frustration) will last far longer if you do not engage in some proper training.

If you have never used a PC before, this first means some basic training in how the Windows operating system works, possibly some training on the basic concepts behind Microsoft Office-style packages (as most IFA systems operate in a similar way) and then a couple of days dedicated training on the actual system you are going to use.

Just as having all your client records and fact-find details in your system will save you a massive amount of time in the long run, so investing in training at the beginning will mean that you start getting payback on your investment far sooner.

You also have to remember that if you are going to start using an IFA back-office system, you have to get religious over it.

Most of the better systems today can significantly reduce the burden of creating periodic regulatory reports. This only works, however, if you include every last transaction on the system. If you use it for 95 per cent of your work, the manual processes of inclu-ding the extra 5 per cent will undermine the overall benefit significantly.

Using such systems requires a strict adherence to systems and processes but then, these days, so does operating in a compliant manner. This does not mean you cannot give the inputting work to an administrator to carry out. They will probably have better keyboard skills, anyway.

Turning to the question of cost, if the software is complex to use – being able to map and track a large number of processes and analyse large amounts of data – it follows that it will take considerable time and money to develop. If you then want to take complex software and make this easy to use, the likelihood is that it will cost even more. First, you have to build a complex system, then make it easy to use. This all adds to the development cost. Like everything else in life, you get what you pay for.

When working out the real cost of their software, I would suggest that IFAs need to factor in the long-term benefits they will be able to achieve once all their clients&#39 details are loaded. Moving client records on to the system is a significant investment in the future of that business in terms of the ability to operate more efficiently and cost-effectively. It will also improve the potential resale value of the business.

Any good IFA will be quick to point out that the best investments are not necessarily those with the lowest charges but those that show the best overall return over the lifetime of the investment. Perhaps it is time for more IFAs to start thinking about their software in the same way?

For those who do not know it, FinservUK Ecom is one of a group of discussion lists operated by Gordon Burns of Silverquick which discusses a wide range of e-commerce issues. Other lists cover general industry issues, marketing, professional qualifications and specific issues. They are well worth a look. For more details, see

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 and The Exchange. He can be contacted by email at

Tel: 020 7935 2599


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