This straightforwardness and simplicity is a perennial issue for the financial advisory market, given the increasing demands of investors, the need for high quality advice and the considerable amount of paperwork and administrative tasks that need to be processed.
The UK independent financial adviser (IFA) market currently serves just under 400,000 high net worth (HNW) individuals, whose combined liquid assets exceed GBP232 billion. Further to this, HNW IFAs handle 50% of their HNW clients' investment and protection portfolio.
Given the crucial role of IFAs, the IFA channel gives product providers an opportunity to sell a broad range of products to the UK HNW market. However, HNW IFAs' perception of product providers' attempts to attract their business is generally poor, with most citing a perceived lack of effort from most insurers to provide adequate levels of service or quality of products.
In its survey, Datamonitor asked HNW IFAs to rank providers in terms of time management, quality of communication and efficiency of processing claims and queries. Skandia received 37% of first place rankings for all providers, while Standard Life received 26% of first place rankings in terms of quality of communication and efficiency of processing claims & queries. Skandia & Standard Life also received 27% of first place rankings each in terms of efficiency of commission payments.
Skandia's popularity bolstered by online presence and product strength
Skandia was the most popular provider among HNW IFAs. HNW advisers particularly praised the company's strong product ranges, as well as the company's online presence. Skandia's online pension facilities were also praised, with the ability to fully interrogate client data, carry out historical evaluations and purchase online all seen as major benefits by HNW advisers, especially given the more complex and time-consuming nature of dealing with pensions for the wealthy.
Standard Life was the second most popular provider among HNW IFAs, with HNW IFAs maintaining a much more favorable view of the company than mass market IFAs. HNW IFAs were particularly impressed with company's investment asset allocation tools, which allowed the full diversification of HNW IFAs' clients' larger investments. Furthermore, HNW IFAs were also impressed with the company's broker consultant network and the service available through local offices, both of which were seen as excellent and providing value adding services to Standard Life's products.
Time is the essence
Quality of communication is a key time-saving element for HNW IFAs. The survey respondents were presented with a variety of time-saving factors, such as speed of dealing with problems, efficiency of commission payments and useful information about new products, but almost a third of responses showed quality of communication as the most likely factor to save HNW IFAs some eight hours of their time. Often with HNW clients who are interested in more complex and less risk-averse products, effective and efficient communication becomes essential so that IFAs are left with more time to devote to researching investment products.
In terms of future developments to help HNW IFAs save time, the improvement of provider helplines is important in ensuring that good communication continues between both the provider and advisory parties. Improving the speed with which particular issues are addressed and the length of time IFAs spend on the phone is again important in ensuring that IFAs can allocate the maximum amount of time to revenue-generating activities. A personal visit is often too time-consuming and unnecessary, so if issues can be rapidly addressed and discussed over the phone with an expert provider representative, IFA opinions of providers will be vastly improved and will therefore add to the perception of 'good service.' 'End Intelliext
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