London, 18th February 2005 - A new report* by independent market analyst Datamonitor (DTM.L)reveals that large UK IFAs suffer substantial losses due to IT systems failing them. According to the report, a large IFA, employing advisers with in-house IT support, can lose up to #48,000 of business in lost adviser time per year as a result of failing IT. The same IFA could also potentially lose #84,000 in lost business if they rely on telephone call-out, rather than in-house, support. The report says the loss is most keenly felt among IFAs that rely on a DIY approach to their IT. These are typically the small IFAs and sole traders that form the bulk of the IFA market, who lose one working week per adviser per year due to IT problems**.
"The results of the survey shatter the myth of IFAs being 'technophobes'. On the contrary, the level of technology in the average IFA office in the UK is in-fact very high. However, IFAs are still suffering a great deal of lost adviser time as a result of IT failing them," comments Mark Tucker, financial services analyst at Datamonitor and author of the study.
According to Datamonitor, IFAs that have in-house IT support lose on average 16 hours of adviser time per adviser per year. This figure is 28 hours for those with telephone call out support. IFAs that take the DIY approach lose on average 36 adviser hours, equivalent to one working week, per adviser per year.
IFAs that submit business electronically expect the average amount of business they submit on-line to more than double from 19% in 2004 to 44% in 2006. While term assurance is expected to have the highest electronic submission levels among IFAs that submit business electronically, rising from 27% now to 54% in 2006, the fastest growth is expected with mutual funds, with submission levels nearly trebling from 14% in 2004 to 40% in 2006. These figures are 22% and 43% for mortgages and 14% and 38% for life-based saving policies and pensions.
"Even an IFA with in-house IT support can still expect to lose up to 16 hours per adviser of adviser time each year, which can be a large cost for the national firms who can be employing several hundred advisers at a time. With the increasing importance that technology plays for the modern IFA, and with ever growing pressure from providers to move to paperless systems, problems with IT are clearly a thorn in the IFAs side, costing them precious revenues."
Notes for Editors:
*The Future of IFA Technology
Technological development is rapidly changing the IFA market, offering major efficiencies, broadening the offering and reducing timescales. However adoption by IFAs remains patchy and many IFAs are suspicious of communicating electronically. This brief gives a snapshot of the current technological capabilities of IFAs and how they plan to utilize technology going forward.
Datamonitor's quarterly in-depth survey of 100 national, regional, network and sole trader IFAs canvases opinion on the subject of technology.
The survey assesses whether IFAs have the adequate hardware and processing power required by portal and internet services.
IFAs are asked to provide detailed estimates of the percentage of their on-line time spent on the Internet for a range of activities.
The 2004 survey highlights a major shift in the use of technology in customer service with the number without a web presence more than halving.
**The calculations assume an hourly rate per adviser of #60.
Further details are available from Roopa Ramaiya in the Datamonitor press office on
+44 20 7675 7487 or firstname.lastname@example.org
Mark Tucker, financial services analyst and author of the report is available for comment.
Datamonitor plc (DTM.L) is a premium business information company specialising in industry analysis. We help our clients, 5000 of the world's leading companies, to address complex strategic issues. Through our proprietary databases and wealth of expertise, we provide clients with unbiased expert analysis and in-depth forecasts for six industry sectors: Automotive, Consumer Markets, Energy, Financial Services, Healthcare, Technology. Datamonitor maintains its headquarters in London and has regional offices in New York, Sydney, Tokyo, Frankfurt, Shanghai and Hong Kong. See www.datamonitor.com for further details.
Published on: 12:00AM on 18th February 2005