Financial Advisors' Views of Service

• A Datamonitor proprietal survey of 100 UK IFAs revealing their views on providers' service offerings and elements of service.
• In-depth analysis of the impact of providers' service on the efficiency of the IFA business model.
• Reveals IFAs attitudes towards the service offered by 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 service offerings.
• Helps clients design their service proposition to meet the needs of IFAs, providing knowledge of the most likely service aspects to be demanded.

Overview

Catalyst

Summary

Methodology

Executive Summary

Table of Contents

Table of figures

Table of tables

Key Issue - Advisors' time spend on administration tasks

Introduction to Datamonitor's Q2 2008 financial advisor survey

The average annual turnover of IFAs in this sample is £328,000

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

Business is more highly concentrated among a small number of mutual fund providers than it is in the more disparate life market

Advisors invest the highest percentages of their life and pensions business with Skandia, Aviva and Standard Life

Advisors conduct the highest percentages of their mutual fund business with Fidelity and Invesco Perpetual

Financial advisors have a positive view of Skandia, Standard Life and Aviva as life companies

Skandia is perceived particularly strongly

Abbey is viewed more negatively by IFAs than other life companies

IFAs find that many providers' product sets do not match their business model

Invesco Perpetual and Fidelity rank top among mutual fund providers, while HSBC is at the bottom

IFAs are hindered by the burden of administration

IFAs spend more than half of the working week undertaking administrative tasks

Research, paperwork and compliancy take the most time out of advisors' working week

Sole traders in particular need support from providers to reduce their administrative burden

Skandia and Fidelity are seen as offering superior service

Skandia is seen as offering the best service among life companies

Abbey is perceived as offering relatively poor service to its advisor clients

Fidelity offers high service levels, while HSBC offers the weakest service among mutual fund providers

Aspects of service are crucial in advisors' relationship with providers

£1.7 billion a year lost by advisors undertaking admin tasks

Improvements to aspects of service can add value

Standard Life received the highest ranking in all mediums of service

Speed and efficiency of service are vital aspects for financial advisors

Advisors favor using telephones over conducting business online

Online services are important to financial advisors

The ease with which online systems can be used is important in increasing IFAs' perception of service

The ease with which online systems can be used is more important to small IFAs

Efficiency and speed of use varies between products

69% of IFAs do not process bond applications online

Fund supermarkets and wrap platforms have influenced the way in which providers' online systems are used

Life assurance applications when conducted online by IFAs are very lengthy

Financial advisors prefer to work with knowledgeable domestic call centers

Frequent face-to-face contact from providers is desired by advisors

Contact and case ownership will improve trust and reliance between advisors and providers

Some providers do not offer face-to-face contact

Overall, advisors want more communication

APPENDIX

Definitions

Single premium policy

Regular premium

Wrap accounts

Product definitions

Life based savings products

Life Assurance

Single premium life

With-profit bond

Unit-linked bond

Income and growth bonds

Guaranteed equity bonds

Distribution bonds

Purchased life annuities

Other bonds

ISAs

Matrix-Data definitions

IFA firm types

Bibliography

Further reading

Ask the analyst

Datamonitor consulting

Disclaimer

List of Tables

Table 1: Average annual turnover of IFA sample

Table 2: Average case size of business dealt with by financial advisors

Table 3: Average case size by type of IFA structure

Table 4: What percentage of your life and pensions business do you conduct with the following providers?

Table 5: What percentage of your mutual fund business do you conduct with the following providers?

Table 6: What is your view of the following providers?

Table 7: Results of financial advisors' view of the following life companies in Q1 2008

Table 8: Life companies' products not matching an IFA's business model

Table 9: What is your view of the following mutual fund providers?

Table 10: Mutual fund providers' products not matching IFA's business models

Table 11: How many hours a week do you spend undertaking admin tasks?

Table 12: Hours per week spent on admin tasks by type of IFA structure

Table 13: Ranking of life companies based on service they provide

Table 14: Ranking of life companies in terms of service

Table 15: Ranking of mutual fund providers in terms of service

Table 16: Standard Life is perceived as best across different mediums of service

Table 17: Ranking of the most important aspects of service

Table 18: What is your preferred method of communication with providers?

Table 19: What improvements to a provider's website would make the biggest difference to your perception of their service quality?

Table 20: Aspect of service by type of IFA structure

Table 21: How long does it take to conduct a bond or life assurance application through a provider's website?

Table 22: What improvements to a provider's call center would make the biggest difference to your perception of their service quality?

Table 23: What improvements to your face-to-face contact with providers' representatives would make the biggest difference to your perception of their service quality?

Table 24: Improvements to face-to-face contact 'Other' breakdown

Table 25: What can providers do to improve levels of communication between themselves and IFAs?

Table 26: Which of the following best describes your company?

Table 27: The annual turnover of IFAs in the UK (2007)

List of Figures

Figure 1: Sole traders account for two thirds of firms surveyed

Figure 2: The average annual turnover of IFAs in the sample is £328,000

Figure 3: Most of the IFAs in the UK market have an annual turnover of between £100,000 and £500,000

Figure 4: Financial advisors deal mostly with average case sizes of less than £5,000

Figure 5: Most sole traders generate case sizes of less than £5,000

Figure 6: The highest percentage of advisors' life and pensions business is conducted with Skandia

Figure 7: Advisors conduct most of their mutual fund business with Fidelity and Invesco Perpetual

Figure 8: Financial advisors are most impressed by Skandia, Standard Life and Aviva

Figure 9: Q1 2008 advisors survey shows financial advisors favoring Standard Life

Figure 10: Life companies' products are not matching IFA business models

Figure 11: Invesco Perpetual and Fidelity are highly regarded by financial advisors

Figure 12: Mutual fund providers' products not matching IFA business models

Figure 13: Financial advisors spend more than 20 hours per week on administrative tasks

Figure 14: Sole traders spend more than half of their working week on admin tasks

Figure 15: Advisors perceive Skandia to be offering the best service

Figure 16: Fidelity and Invesco Perpetual are seen as the mutual fund providers that offer the best service

Figure 17: Standard Life provides an intuitive and transparent website for advisors

Figure 18: Skandia's formal advisor micro-site

Figure 19: Speed of dealing with problems and support is important to financial advisors

Figure 20: Advisors prefer using telephone to conduct business

Figure 21: Easier navigation of a provider's website is crucial to an advisor's perception of service quality

Figure 22: Sole traders would like a provider's website to have easy navigation

Figure 23: Efficiency and speed of use of providers' online systems varies between bond and life assurance applications

Figure 24: Advisors want call center operators with better knowledge of products and services

Figure 25: Financial advisors suggest more frequent contact with a provider's representative as an improvement to service quality

Figure 26: Advisors desire more communication with providers