By Pravin Jeyaraj Merger and acquisition activity taking place in the UK financial market, has left...
By Pravin Jeyaraj
Merger and acquisition activity taking place in the UK financial market, has left many groups struggling to find fast solutions to the integration of operations.
As intermediary groups merge and expand, there are a number of issues concerning systems and technology that IFAs are having to tackle.
The merger of Abbey National IFA and Willis Corroon Financial Planning in 1997 brought together a mix of systems, hardware, operations and methodologies.
The prospect of co-ordinating, merging and developing them into a coherent force can be daunting.
It was Collett English, IT director of Willis Corroon, who faced the challenge of combining the two operating systems, neither of which were year 2000 compliant.
Some 40 different databases across systems from two different software houses also had to be integrated and there was six months until the launch of the new company.
English said: "We opted for a link between the two systems, rather than try to launch a new company, so that they could operate in all branches while we specified what was required from a new system."
Bulent Osman, UK regional director of technology firm Savvion, said the most difficult stages are determining the actual needs of the client and how to integrate or transfer data from two different systems.
The key consideration for Willis National was working out what the advisers and administrators needed to help them do their job.
From there, a list of requirements regarding analysis, back office systems, administration and business processes and management information was drawn up.
English said: "We needed to get a new system up and running very quickly because we wanted a full year operation before the millennium and wanted to get a full year's management information from one system.
"I issued a memo to all staff in October 1998 stating a new administration system would be up and running by 1 January 1999 and I know that most of them didn't believe me."
Trudi Baddeley, client relationships manager for technology firm 1st Software, said the length of the development process is dependent on a number of variables, in particular, the size of the data transfer.
On average, though, it would take up to four weeks.
Joanne Hindle, marketing director at Tep Exchange, said: "The answer is a classic 'how long is a piece of string.' It can take as long as the IFA is willing to spend, which is often the problem.
"If an IFA decides he want a system within a week, it can be done, but he might want to do a lot of research with a full analysis of requirements and costs, in which case it could turn into a six-month to a year long project."
She added with big companies like Standard Life there is usually a team of IT staff to work on the project but in an IFA business it will probably be the managing director or finance director who has to deal with it.
The main task of Willis National was to ensure that the hardware was in place for the software to be implemented.
Over the course of a month, the team upgraded 50 PCs and replaced over 1,000, installed a server at Willis National's central computer and converted 40 different databases to a unified system.
Willis National also had to decide who needed training and which parts of the system they did not need to use.
Collett said: "We had a good team of people with a mix of business, company and technical knowledge working on the project and that helped with the smooth implementation from development through to training."
As for the system at Willis National and Abbey National it is now installed and running.
She said: "It is important to keep moving on and since the installation we've also deployed 200 adviser laptops, set up a new email service and are setting new standards for data entry."
Hindle said as most IFAs have some computerisation in their offices already, most of the issues are to do with upgrades or launching onto the web.
"The biggest problems are how far and how fast to go with upgrading and deciding whether what they have is good enough," she said.
"In terms of launching onto the web, I do not think anything can beat using other sites themselves to see what works and what doesn't.
"If they find a site user friendly, learning from that should affect their own design."
She believes IFAs will be forced more and more to consider web solutions as suppliers target them online and more people become web-enabled.
Hindle said: "As more people are using the web in all aspects of their life, increasing numbers of customers or potential customers will expect to be able to access some aspect of the firm electronically, even if it is just to conduct a first search. The experience of Tep Exchange is that many IFAs are already happy and eager to trade over the web, and are meeting a client's needs in doing so."
Meanwhile, technology firm 1st Software is joining forces with Investment Week to offer intermediaries the chance to win a free software and services package worth £10,000.
The aim of the competition is to help the winning IFA to create a model office demonstrating the value of a defined technology strategy.
1st Software's contribution will be a year-long software and consultancy programme and it is looking for service-driven IFAs who believe that technology is the key to successful client management and business profitability.
To enter, just submit a 500 word response detailing the advantages your business would gain from utilising technology in client servicing, office administration and new revenue opportunities. The progress of the winn
Despite improved risk appetite
FOS award limit increase
Relates to 136 million transaction reports
Ceremony will take place 13 November