Defaqto is launching an online research service for financial adviser firms next month which allows them to conduct a whole-of-market search for products matching the needs of their clients.
Called Aequos Engage, the new service which goes live on 10th May essentially acts as a search engine of all products in the life, pensions, investment, Isa and offshore markets, as it sources over 5,300 products from more than 400 providers in 69 different product sectors.
The search tool allows the user to drill down all of the key features they might want to know related to a specific product, such as the financial strength of the company, service quality, administration, charges and investment performance where appropriate, in order of preference and then select all of the product offerings meeting those criteria.
More specifically, the research capability allows the user to sift through all the product options, and can review the entire unit trust and Oeic database of 1600 funds in a matter of minutes as well as performance data on over 7000 life and pension funds, to deliver a list of recommended products and funds where appropriate.
In reverse, if there is a specific investment fund which the intermediary thinks might suit the client, they can also use the system to find out which provider offers a product with external fund links to it.
According to anecdotal background comments gathered by Defaqto ahead of its software development, IFAs are not interested in using an end-to-end online facility created specifically by one company, but is more likely to adopt ‘best of breed’ services for each part of the financial advice process and client management.
The Engage service will supply the research into product selection and can also produce text for a full product justification report, as well as fund fact sheets, introduction or suitability letters, and the ‘DNA score graphs’ - displaying which products best meet key criteria - to be sent to the client if the intermediary chooses.
Not only do suitability letters and client reports show why those products might be most suited to the client’s needs and match product criteria, but they also provide a data comparison against the features of the other products presented at final product comparison.
At the same time, the Aequos Engage system has been built to be used in the office or remotely, and Defaqto is talking to other web-based quotes portals and investment platforms about further link-ups in the future, alongside report writing services.
David Lee, research director at Defaqto says once the system goes live, the service will be able to deliver details of all new products and a product’s external fund links (and relevant changes) to the adviser’s desktop within 24 hours.
He adds the firm will also, at a later stage, add a facility which allows the adviser firm to recommend a specific wrap platform and explain to the client why that tool might be more suitable to their needs.
Lee points out intermediaries operating in Australia, for example, use an average of 2.1 wrap platforms, rather than selecting one single offering, so this would give provide advisers with the means of explaining why one platform might be better suited to the client’s needs than others.
Further evidence also suggests IFAs do not want the wrap platforms to decide for them which product terms might best suit client needs, but will seek out best of breed products and then select a platform which would additionally suit the client as well as explain the additional which might accompany use of such a platform.
The new Defaqto service already has the backing of intermediaries, based on comments by Nat Parmar, managing director of IFA firm the Arden Court Group in Nottingham, who claims it surpasses the facilities offered by its closest rival, Synaptic Systems.
The advice process needs to be streamlined so advisers can concentrate on their job which is to provide the best possible service to clients,” says Parmar.
“We have selected Aequos Engage over Synaptic Manager because for some time now IFAs have been calling for an online product which combines speed and ease of operation with robust compliance reporting and the potential for integration with other software services.”
The Engage facility has also been designed to present all the required information on each client recommendation in a downloadable spreadsheet for FSA compliance purposes, says Lee.
The system will not, however, conduct research on investments such as venture capital trusts.
IFA firms looking to use the new service would expect to pay an average of £75-80 for the main software licence and a further £5 for each additional user, but the cost is likely to reduce for firms using the service through networks and other support services.
Lee hopes the new development will encourage an additional 1000 intermediaries to use the Defaqto systems within 12 months.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Julie Henderson on 020 7968 4571 or email [email protected].IFAonline
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