Tough equity markets have, in many ways, been a great leveller for the fund management industry. Lar...
Tough equity markets have, in many ways, been a great leveller for the fund management industry. Large or small, almost all companies have seen revenues fall, with equity markets and a bleak business outlook prompting extensive cost-cutting exercises. As a result, softer areas such as service could be starved of investment going forward.
However, even if market volatility makes future revenues difficult to predict, a strong service proposition is something all product providers should still aim to deliver to intermediaries and their clients.
Product providers need to give advisers the support they need to do their jobs effectively. As our main source of new business and historic generators of much of our growth, it is entirely logical for us to invest in support for our main distribution channel.
The composite parts of a good service proposition are relatively simple and revolve around good communication. For example, fund performance reports should be detailed, transparent and relevant and intermediaries should have access to experienced sales professionals who are able to advise and support them in their business activities.
Technology can significantly improve service, if used correctly. In our opinion, IVR (call recognition technology) is a bad idea ' no one likes talking to a machine ' but good systems that allow intermediaries to check their clients' holdings and transactions online make a positive difference.
The internet is clearly a powerful communication tool and since more than 96% of IFAs have online access, it is the most efficient way for us to disseminate information. My company Investec, for example, has developed a website with literature downloads and makes use of email to inform IFAs of key developments, discount offers or conferences.
While technology and the internet can help, it is only part of the service mix. Most communication is still conducted by phone so it is important to have a well resourced and knowledgeable call centre.
Unfortunately, large companies often like to structure their call centres as a production line manned by a multitude of people who specialise in one area but often lack an overall knowledge of investments or the firm's products and services.
The model works better for the product provider than the intermediary; the company is less vulnerable to staff departures but it means callers must often pass through several hands before they can resolve an issue.
No single person takes ownership of a problem when, in fact, this is exactly what is required. At Investec, we believe a team of generalists, highly trained across the full range of products and services and possessing professional qualifications such as FPC or IAC, works better.
If things go wrong, advisers should be able to move easily up the chain of management command. We feel intermediaries understand that mistakes can happen but the way they are handled determines their view of the company.
Investec has built its service using these ideas over the four years since the arrival of the new management team. We improved our systems, introduced monthly manager updates for our key funds, written by the managers, and put them on our website. We also eliminated our direct sales focus and refocused on intermediary.
Andy Sowerby, joint managing director, Investec Fund Managers
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