Financial advisors' views on technology 2008

• A Datamonitor proprietal survey of 100 UK IFAs revealing their views on technology.
• In-depth analysis of the impact of technology on the efficiency of the IFA business model and the varying levels of usage in the industry.
• Reveals IFAs attitudes toward life companies and mutual fund providers in the UK.

• Gives access to Datamonitor's proprietal survey of UK IFAs from Q1 2008.
• Gives detailed assessment of IFAs' views of life companies and mutual fund providers and their technological offerings.
• Helps readers design their online proposition to meet the needs of IFAs, providing knowledge of the most likely online services to be demanded.

DATAMONITOR VIEW

CATALYST

SUMMARY

ANALYSIS

The financial advice survey tracks the main changes in advisor opinion each quarter

Financial advisors have a particularly positive view towards Standard Life, Legal & General, Aviva and Scottish Equitable as life companies

Financial advisors are dealing less with Skandia because its products don't match the business models of IFAs

Friends Provident revealed a £46m loss in 2007, and has made job cuts, lost its finance director and is at the center of takeover speculation

A small percentage of IFAs will not work with some insurance providers because of a negative experience in the past

Aviva and Abbey are viewed more negatively by IFAs than other life companies

Financial advisors have a particularly positive view towards Fidelity, Invesco and Jupiter as mutual fund providers.

Invesco Perpetual is one of the largest independent asset management companies in the UK

Fidelity is popular but recent research shows their UK fund underperforming

The Jupiter Group has received more than 120 awards over the past four years

Some large life companies have low online penetration but others are winning

The providers most used for online services are Legal & General, Norwich Union and Friends Provident

Legal & General, Norwich Union and Friends Provident are more popular as providers of online services because they are more actively promoting their online services

IFAs favor applications over enquiries when conducting online business

The majority of IFAs conduct less than 25% of their new business through online systems.

The internet is widely used by UK households to enquire about financial services

Bond and protection applications are the most favored online business for IFAs

Bonds applications are less dependent on individual data capture

IFAs do not apply online for bonds because they find it easier to complete applications offline

Some types of protection application are more formulaic and therefore more easily conducted online

Just 37% of all pensions applications made by IFAs over the last six months have been online

SIPP products and their customers are more suited to online applications than standard pensions

Technology and communications are pivotal in the development of the SIPP market

Towards a more simplified future UK pension market?

New business tracking enquiries are more popular online than policy enquiries

IFAs are still not convinced that their new business tracking enquiries can be answered online

Policy enquiries are the least favored online activity with IFAs believing that they can get better quality information over the telephone

IFAs do not show an interest in support services using new technology

Unipass certificates are important tools

IFAs conduct less that 25% of their new policy business online and prefer to deal directly with providers

IFAs are more interested in working directly with providers rather than through fund supermarkets and wrap platforms

Wrap platforms need to have better functionality for IFAs to use them more

Providers need to give more online support to IFAs in a challenging market

Wraps and fund supermarkets are a convenient way for IFAs to manage their client business

Fund supermarkets already operate some elements of wrap

Life and pensions providers have the scale to launch and develop Wrap

Wrap should be viewed and sold as a new distribution channel rather than as a product

Providers or fund supermarkets offering Wrap technology need to pay attention to the needs of IFAs for successful distribution in the intermediary market

APPENDIX

Definitions

Data

Bibliography

Methodology

Further reading

Ask the analyst

Datamonitor consulting

Disclaimer

List of Tables

Table 1: Which of the following statements best describes your attitude to these providers?

Table 2: Which of the following statements best describes your attitude to these insurers? Q1 2007

Table 3: Which of the following statements best describes your attitude to these mutual fund providers?

Table 4: Which of the following statements best describes your attitude to these mutual fund providers? Q1 2007

Table 5: Have you made any of the following applications / enquiries offline or online in the last 6 months?

Table 6: Have you have made a new business tracking enquiry offline instead of online in the last 6 months?

Table 7: Why do you make new business tracking enquiries offline instead of online?

Table 8: Have you made a policy enquiry offline instead of online in the last 6 months?

Table 9: Why have you made policy enquiries offline instead of online in the last 6 months?

Table 10: What type of organization do you work for? Q4 2007

Table 11: What is the average case size of business you deal with?

Table 12: What proportion of your new policy business do you conduct through the following online systems?

Table 13: Have you made a bond application offline instead of online in the last six months?

Table 14: If you have made an offline bond application in the last 6 months, why did you choose to make the bond application offline?

Table 15: Have you made a protection application offline instead of online in the last 6 months?

Table 16: If you made a protection application offline rather than online in the last six months, why did you choose to make the protection application offline rather than online?

Table 17: Have you made a pension application offline instead of online in the last 6 months?

Table 18: If you made a pension application offline rather than online in the last 6 months, why did you choose to make the protection application offline rather than online?

Table 19: SIPP new business is forecast to continue to increase in the pensions market

Table 20: \Were any of the offline pension applications you made in the last 6 months for SIPPs? (Base: those IFAs who have made an offline pension application in the last 6 months.)

Table 21: How interested would you be in any of these online services from a product provider?

Table 22: If you conduct less than 25% of your business thorough a wrap platform, which online services attract you to a wrap platform?

Table 23: To what extent do you agree with each statement?

List of Figures

Figure 1: Financial Advisors have a particularly favorable attitude towards Standard Life and Legal & General as insurance product providers

Figure 2: Some life companies are less highly regarded than in Q1 2007

Figure 3: A small percentage of IFAs will not work with some insurance providers because of a negative experience in the past

Figure 4: Financial advisors are most impressed by Fidelity, Invesco and Jupiter as mutual fund providers

Figure 5: A small percentage of IFAs will not work with some mutual fund providers because of a negative experience in the past

Figure 6: Most mutual fund providers are more highly regarded than in Q1 2007

Figure 7: Some large life companies have low online penetration although others are winning

Figure 8: Bond applications is the favored type of online business for IFAs, with half having made online bond applications during the last six months

Figure 9: The IFA industry is characterized principally by single outlets

Figure 10: The IFA industry is characterized principally by case sizes of less than £5,000

Figure 11: The majority of IFAs conduct less than 25% of their new business through online systems

Figure 12: Half of all bond applications by IFAs are made online

Figure 13: IFAs make bond applications offline because they find it easier than online

Figure 14: Nearly half of all protection applications made by IFAs over the last six months have been online

Figure 15: IFAs make protection applications offline because they find it easier than online

Figure 16: 37% of IFAs have made an online pension application in the last six months

Figure 17: IFAs find pension applications easier to complete offline

Figure 18: SIPP new business is growing and well suited to new technology

Figure 19: 40% of IFAs have made an online SIPP application in the last six months

Figure 20: IFAs prefer to conduct new business tracking enquiries offline rather than online

Figure 21: IFAs are concerned about the quality of information available online when tracking new business

Figure 22: Policy enquires are least likely to be conducted online than other types of IFA business

Figure 23: IFAs believe that they get more reliable information about policies by telephone

Figure 24: IFAs do not show an interest in support services using new technology

Figure 25: IFAs would like more support to better utilize wrap platforms

Figure 26: IFAs think that they get sufficient support from providers, but would like more tools available online