Advisers without web-based front and back office software are being warned they could be left behind as stricter regulation sweeps across the industry.
Nick Eatock, chief executive of IntelliFlo, says the demands placed on advisers – such as changes to the Conduct of Business (COB) rules and new initiatives including treating customers fairly (TCF) - have never been higher.
He says desktop solutions are still the preferred methods for most advisers but warns they do not have the fail-safes of web-based tools.
In addition, Eatock says front and back office solutions run through the internet can help firms, not just individual advisers, build up a relationship with clients.
“Back in the 90’s advisers didn’t really need a particularly efficient information system – perhaps just a desktop tool which listed all the adviser’s clients,” he says.
“But now they have to deal with stricter regulation and the requirements and demands on IFAs are much higher, take TCF for example.
“Another is COB, in which there is something called Business Continuity Planning (BCP). This requires advisers to have things in place should a fire or something equivalent wipe everything out.
“With a web-based system, that is not such a problem.”
Eatock adds: “I think it’s going to get to the point where all companies, not just IFAs, are going to be using web-based solutions. They’re going to have to. IFAs that don’t do that will be left behind and, at the moment, most IFAs have yet to make that jump.”
Eatock says the trend of IFA consolidation is growing and, in merging software solutions, the new firm is likely to run into difficulty. “To try to integrate those together is virtually impossible for a non web-based infrastructure,” he says.
He says those adviser firms switching to a web-based solution will also be able to build stronger relations with consumers thanks to the real-time online valuation tools they offer.
“An IFA company needs to keep clients close to the business, not just to the individual adviser,” he says.
“At the moment, if an adviser leaves a company, many of his or her clients will go with them. But with web-based solutions like ours, we enable clients to see how their investments are doing online in real time, so not only does the adviser strike up a relationship with the client, but so does the company.”
However, Eatock admits the market for front and back office technology is growing and could be confusing for advisers.
“There are a lot of firms out there and because of that it becomes quite difficult for advisers. They have to wade through all the market spiel and get to the truth.”
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