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Financial Advisors' Views of Service

Datamonitor
September 12, 2008
33 Pages - SKU: DFMN1905521

Abstract Table of Contents Search inside this report Related Reports

Introduction

A survey based study examining how aspects of provider service are affecting the business of financial advisors in the UK. The report gauges how well providers are supporting IFAs to minimize the time spent on administrative tasks and allowing them to concentrate on core competencies.

Scope

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.

Highlights

This report identifies & analyses key issues relating to providers' service offerings to IFAs. Advisors prefer to conduct business on the telephone rather than online. An assessment of how well providers are harnessing the full benefit of their expensive investments is important, particularly for service efficiency & considerable cost saving.Reasons to Purchase

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

Financial Advisors' Views of Service

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