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Market Research Report

Financial Advisors and Technology

Published by Datamonitor
Published November, 2006 Product code 47691
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This publication has been discontinued on July 19, 2011.

Introduction

Abstract

Overview

Introduction

Survey based brief examining the opinion of financial advisors regarding changes that are occuring in their use and the availability of technology

Scope

  • Survey across 100 advisors revealing their attitudes towards current and future developments in technology
  • In-depth analysis of the impact of technology on the efficiency of IFA business and the varying levels of acceptance within the industry
  • Identification of key issues crucial to the industry and forecasts for the future uptake of technology among the IFA industry

Report Highlights

This report identifies and analyses key issues relating to IFAs use of technology including online presence, investment, attitudes toward both the customer and provider interface, and forecasts of future technological usage. In a rapidly changing climate an understanding of these issues is vital for successful transition into a new era.

Reasons to Purchase

  • Identify market opportunities by discovering which areas IFAs are most happy with technology, and where they are dragging their heels
  • Identify the key concerns and fears IFAs have regarding technology, and use them to your advantage
  • Ascertain future trends in order to increase awareness and direct your business towards the most profitable areas of IFA technology

Table of Contents

  • CHAPTER 1 EXECUTIVE SUMMARY
    • Market Context
    • IFA technology
    • IFAs' changing attitudes to the customer interface
    • IFAs' changing attitudes to the provider interface
    • The Future Decoded
  • CHAPTER 2 MARKET CONTEXT
    • Key findings
    • Introduction
      • Characteristics of the financial advice market survey
      • The sample of financial advisors
        • Network members accounted for over a third of the surveyed panelists
      • The average financial advisor is male and over the age of 30
      • Almost three quarters of financial advisor business comes from the mass affluent market
    • Cautious optimism prevails among most financial advisors
      • Around half of surveyed IFAs expect limited growth over the next six months
    • A stable market is predicted for most products over the next six months
      • ISAs and SIPPs are predicted to see the most growth
      • IFAs predict static sales in most non-SIPP pension and protection products
      • With-profits bond sales will continue to fall
    • Overall the IFA attitude towards providers is encouraging
      • Mutual fund providers are rated more positively by financial advisors than life companies
      • Skandia is the most popular insurance provider by a significant margin
    • Financial advisors are beginning to make the move towards fee-based business
      • Over 90% of IFAs participate in some type of fee-based business
      • Protection products attract the lowest proportion of fee-based business
    • Existing customers are the most lucrative for IFAs
      • However, the majority of IFAs spend little time on client recruitment
    • Data
  • CHAPTER 3 IFA TECHNOLOGY
    • Key Findings
    • IFAs' use of technology has increased since 2004 but the changes are largely cosmetic
      • Over 50% of IFAs have updated their technology within the last 2 years
      • IFAs prefer simplistic operating systems
      • IFAs internet usage has improved and extended to incorporate more sophisticated functions
      • Over two thirds of IFAs still store their data using paper copies
      • There remains a proportion of IFAs who continue to avoid basic technology
      • The majority of IFAs have no plans to invest further in technology
    • IFA technology support and online usage has improved since 2004
      • IFAs' online time is mainly used to investigate new products
      • The Exchange has remained the favourite website of IFAs since 2004
      • IFAs methods of dealing with technological problems remains largely unchanged since 2004
      • IFAs are losing less time over technological problems than they were in 2004
    • Data
  • CHAPTER 4 IFAS' CHANGING ATTITUDES TO THE CUSTOMER INTERFACE
    • Key Findings
    • IFA communication with clients is becoming more sophisticated
      • Email is becoming the most popular method for IFAs to communicate with clients
      • IFAs' online presence is impressive but superficial
      • IFAs without websites primarily see online presence as unnecessary
    • The threat of direct providers
      • IFAs continue to see the biggest competition coming from direct providers of term life assurance
      • There are minimal threats from direct providers in other areas
    • Data
  • CHAPTER 5 IFAS' CHANGING ATTITUDES TO THE PROVIDER INTERFACE
    • Key Findings
    • Communication with providers is becoming more technology-friendly but has a long way to go
      • Telephone contact is still the most common way for IFAs to communicate with providers, but email is catching up
      • IFAs continue to make heavy use of portals and use of fund supermarkets is increasing
      • IFAs anticipate strong growth in electronic submissions
    • IFAs' provider concerns
      • Offering a wide range and fast payments are the most important factors when choosing a provider site
      • Security and stability of provider sites are the biggest IFA concerns
    • Data
  • CHAPTER 6 THE FUTURE DECODED: IFA TECHNOLOGY IN 2010
    • Key Findings
    • 95% of IFAs will have an internet presence by 2010
    • IFAs will have to begin integrating technology into their core business proposition in order to survive
      • Increasing levels of IT support will support higher levels of electronic submissions
      • Approximately 75% of total IFA business by revenue will be submitted online in 2010
    • IFAs will continue to invest in technology
  • CHAPTER 7 APPENDIX
    • Supplementary Data: 2004 Survey Results
    • Definitions
      • Definitions of IFA firm types
      • Portal
      • Extranet
    • Further readings
      • Financial Advice Market Briefs
      • Interactive Databases
      • Reports and Briefs
    • SPP writing team
    • How to contact experts in your industry
    • List of Tables
      • Table 1: Does more than 50% of your customer base have assets of over £200,000/below £30,000?
      • Table 2: Over the next six months how do you expect sales in each of the following products to change?
      • Table 3: What is your attitude to the following providers?
      • Table 4: What proportion of your business is fee based in each of the following areas?
      • Table 5: What proportion of financial advisor working time is spent on the following activities?
      • Table 6: Which of the following best describes your company?
      • Table 7: Does more than 50% of your customer base have total liquid assets of over £200,000?
      • Table 8: Does more than 50% of your customer base have total liquid assets of below £30,000?
      • Table 9: Over the next six months how do you expect sales in each of the following products to change?
      • Table 10: What is your attitude to the following insurers?
      • Table 11: What is your attitude to the following mutual fund providers?
      • Table 12: Do you have any fee-based business?
      • Table 13: Approximately what percentage of your annual turnover comes from fee-based business?
      • Table 14: What proportion of your business is fee based in each of the following areas?
      • Table 15: I believe in the next 6 months the IFA market will:
      • Table 16: What proportion of your revenues comes from customers that are?
      • Table 17: What proportion of financial advisor working time is spent on the following activities?
      • Table 18: What proportion of your active online time is spent doing the following activities?
      • Table 19: Top ten favourite IFA related websites, 2006
      • Table 20: Top five favourite IFA related websites, 2004
      • Table 21: Do you have a PC and if so what year did you or your company purchase it?
      • Table 22: Do you know what operating system you use?
      • Table 23: Do you know what Internet browser you use?
      • Table 24: Do you have Internet access at work, if so what bandwidth Internet access do you have?
      • Table 25: How do you store data relating to your business?
      • Table 26: What telephone technology do you use?
      • Table 27: What are your plans (if any) to update the technology you use over the next two years?
      • Table 28: What proportion of your active online time is spent doing the following activities?
      • Table 29: Top ten favourite IFA related websites, 2006
      • Table 30: How do you deal with technological problems?
      • Table 31: Please estimate how much IFA time has been lost per adviser on technological issues in the last six months?
      • Table 32: Approximately what proportion of your communication with your customers is through the following channels?
      • Table 33: How would you summarise your company website?
      • Table 34: Approximately what proportion of your communication with your customers is through the following channels?
      • Table 35: How would you summarise your company website?
      • Table 36: If you do not have a website please state why?
      • Table 37: To what extent do you consider product providers a threat?
      • Table 38: Which of the following portals/ fund supermarkets/ wraps do you utilise?
      • Table 39: How important are the following factors in encouraging you to use a provider' s site/portal?
      • Table 40: What is your preferred method of dealing with product providers?
      • Table 41: Approximately what proportion of your communication with product providers is through the following channels?
      • Table 42: Which of the following do you/will you utilise?
      • Table 43: How often do you use the following provider portals/sites?
      • Table 44: What percentage of transactions do you estimate you submit/ will submit electronically to your product providers?
      • Table 45: How important are the following factors in encouraging you to use a provider
      • Table 46: Which of the following issues connected to electronic communication with product providers concern you?
      • Table 47: Do you have a PC and if so, in what year was it purchased?
      • Table 48: What operating system and internet browser do you use?
      • Table 49: Do you have internet access at work, if so what bandwidth access do you have?
      • Table 50: If you have any plans to update the technology you use in the next two years can you tell us what they are?
      • Table 51: How do you store data relating to your business?
      • Table 52: How do you deal with technological problems?
      • Table 53: Type of IT support versus size of business
      • Table 54: Please estimate how much IFA time has been lost per advisor on technological issues in the last six months
      • Table 55: What proportion of your active online time is spent doing the following activities
      • Table 56: What telephone technology do you use?
      • Table 57: Approximately what proportion of your communication with your customers is through the following channels
      • Table 58: How would you summarize your company' s website for customers?
      • Table 59: If you do not have a website please state why
      • Table 60: To what extent do you consider product providers' websites selling products as a threat to your business?
      • Table 61: Approximately what proportion of your communication with product providers is through the following channels?
      • Table 62: What proportion of transactions do you estimate you submit/will submit electronically to your product providers?
      • Table 63: Which of the following do you utilize?
      • Table 64: Which of the following portals/fund supermarkets/wraps do you utilize?
      • Table 65: How important are the following factors in encouraging you to use a provider' s site/portal?
      • Table 66: To what extent do the following issues connected to electronic communication with product providers concern you?
    • List of Figures
      • Figure 1: Network members account for the most surveyed panelists
      • Figure 2: 90% of surveyed financial advisors were male
      • Figure 3: Over 95% of IFAs were over the age of 30
      • Figure 4: 50% of surveyed advisors predict limited growth over the next six months
      • Figure 5: Almost 90% of financial advisors participate in some form of fee-based business
      • Figure 6: Most IFAs conduct less than 20% of their business on a fee basis
      • Figure 7: Most IFAs gain under 30% of their business from new customers
      • Figure 8: Do you have a PC and if so, what year was it purchased?
      • Figure 9: Microsoft is the most popular system for IFAs
      • Figure 10: The vast majority of IFAs access the internet through a broadband connection
      • Figure 11: Internet technology was less sophisticated in 2004
      • Figure 12: How do you store data relating to your business? (2006)
      • Figure 13: How do you store data relating to your business? (2004)
      • Figure 14: Most IFAs use voicemail as opposed to other forms of telephone technology
      • Figure 15: What telephone technology do you use? (2004)
      • Figure 16: More than half of surveyed financial advisors have no plans to update technology
      • Figure 17: Most IFAs outsource technical support in 2006
      • Figure 18: How do you deal with technological problems? (2004)
      • Figure 19: IFAs are losing less time over technological problems in 2006
      • Figure 20: Approximately what proportion of your communication with your customers is through the following channels? (2004)
      • Figure 21: Most IFA websites simply describe the company and services offered
      • Figure 22: IFAs without a website no longer see it as a top priority
      • Figure 23: Most IFAs do not view direct providers as a threat to their commoditized product area
      • Figure 24: Less than 10% of IFAs see direct providers as a major threat to their non-commoditized business
      • Figure 25: Almost half of IFAs continue to use the telephone to contact providers
      • Figure 26: Approximately what proportion of your communication with product providers is through the following channels? (2004)
      • Figure 27: Most IFAs use portals of some kind
      • Figure 28: Term Assurance will see particularly strong growth in electronic submissions
      • Figure 29: Security of provider sites is IFAs biggest concern
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