I attended the 1st – The Exchange User Conference on the 25th May – not having attended before, the event was a very pleasant surprise. It was well organised, packed with useful exhibits and well attended – so providing a great networking opportunity. From my perspective, it was much better than the MoneyMarketing or Mortgage Expo conferences that I have been to in the recent past. There are few software companies in the Financial service industry that could have pulled off such an event and hats off to 1st – The Exchange for doing such a great job.

1st – The Exchange used the conference to trail a number of interesting developments. The one that gained the most interest was their ‘Client Portal’ and it is an important development for a company that has largely delivered offline technology solutions in the past. The Client Portal quite simply gives the end client a view of the data the IFA holds. It also enables the client to make changes to that data albeit that these changes, for data integrity reasons, aren’t accepted into Adviser Office until approved by the adviser. Client Portal also shows a view of the Portfolio, enabling automated valuations to be requested. Finally, it allows for a secure document store and a protected method of communication between adviser and client.

1st – The Exchange has built the system with mobile devices in mind and demonstrated this with both the iPhone and the Blackberry. Client Portal is a significant development and a positive step forward with a more modern web look and feel when compared to Adviser Office. There is a breed of more modern tools that are being used to engage the end consumer in a number of ways and another good example of such a tool from Sammedia which has a very engaging ‘Apple’ look and feel to it, called MoneyInfo was also on show at the conference.

In addition to the Client Portal, 1st – The Exchange was also showing of its new financial planning tools to the market. Again, what they have built, is an impressive step forward over some of the older, but still widely used Product solutions. Financial planning tools tightly integrated to the back-office makes a lot of sense and my only disappointment with the tools that were on show is that they are probably still six months from general release.

1st –The Exchange is the largest ‘quote and apply’ portal and is still the largest back-office system in the market. As market leader, they are often picked on as the firm people love to hate. However, the value that they provide to the industry has been and still is, immense. The company has a broad set of product functionality and the financial backing to push its strategy forward. It spends more on R&D than some of the smaller companies’ annual turnover. As with all suppliers, clients and consultants like ourselves often want more to be delivered from them sooner and for everything to work as a joined up story. However, we mustn’t lose sight that ‘Rome wasn’t built in a day’ and maintaining existing functionality, renewing it in new solutions and adding innovative ideas for the future is a significant challenge, but is one that the Company would appear to be working towards delivering.

Here at AT8 we are regularly visiting clients, giving presentations about market trends, analysing the paper mountain that is the FSA and attempting to give good advice and guidance.

As we mentioned in an earlier blog (Sociable IFAs), one of our presentations contains some stunning statistics about social media, a topic that we’re being asked about more and more.

Now one area that particularly interests us is video – a massively powerful medium, very under utilised in our space – if you look at the majority of broadcast TV financial services advertising, it’s mainly about brand, very little to do with product and can be crushingly dull. YouTube has the potential to change the dynamic; at five years’ old this week, it is delivering 2 billion views per day – the BBC News website ran a very good piece last Monday – see here

There are a few video evangelists in the distributor space who have conceived and produced some absolutely stunning material – take a look at this video from North Financial Management LLP, an Ulster-based IFA who uses new media very effectively:

Here’s another from Serenity Financial Planning:

With ‘new-age’ consumers creating, handling and uploading more and more video material, the more traditional players in the market really need to wake up to the opportunities this type of media offers. There are some pitfalls, however – most people want ‘broadcast’ quality (or thereabouts) – it’s no good, grabbing the nearest video device, pointing it at a man in a suit and asking him to talk. There needs to be a coherent storyline, creative composition and, potentially, snappy music – but watch out for copyright, performing rights issues, etc. The video service providers are really clamping down on copyright abuse.

Another emerging use of video, is interactivity – with the newer tools, it is possible to create complex menu systems and provide a variable route through the presentation.

Anyway, we at AT8 are still struggling with the concept of producing a video of Mark Loosmore that doesn’t make him look like a twelve year old – but I suspect it’s only a matter of time where we’ll see video as a key part of communicating with our respective audiences.

Many years ago, my PA of the time was a ‘green’ who liked to be called ‘Leaf’. As this was the 80s, the views of the non-driving environmentalist were somewhat unfashionable. Leaf had ‘interesting views’ on a range of subjects, but one crossed my mind recently when I was thinking about risk, regulation and protection. Leaf used to espouse the view that the quickest way to reduce the number of dangerous drivers on the road was to mandate that a large dagger be inserted into the steering wheel of the car! Whilst this was not her own original thought (I have heard it expressed by others), the principle that drivers would be far more careful about the way they drive and risks that they take if the consequence of doing so was the potential dagger through the heart!

Having worked in Financial Services for many years with roles in Sales & Marketing and Regulation, I have witnessed a remorseless increase in the attempts to control the risks of inappropriate advice being given to the consumer. I applaud the principle and much of the effort, but I also share the frustration of constantly being expected to create and keep the mountain of documentation/data records that show that the right procedures and outcomes have been applied. The reason that the regulation has continued to grow is twofold – first, regulators rarely propose a reduction in regulation (especially if it is their career) and second, we have suffered with ongoing evidence that bad practice continues. Indeed, even where people follow the rules, some have done so as a sop and found ways to gain at the expense of the consumers best interests.

A major bank has had its sales practices exposed by a leaked document showing how they ‘incentivise’ (or pressurise) staff to sell riskier product choices with greater points value or commission to influence performance. The headlines do not reflect well on the bank themselves, but they also tarnish other Financial Institutions and the Financial Planning market generally. Consumers should be able to trust all advisers and can find it difficult to distinguish good from bad. However, it is made worse when the corporate culture of what should be a respected brand is driving the policy and expectations of adviser behaviour in negative ways. The bank claims that its processes adhere to the regulations and that they would assess the client’s needs along with attitude to risk etc before recommending a product. Whilst they probably do, it is also the case that skewing the rewards to offer more for one product recommendation than another is likely to drive behaviour towards a particular outcome.
Perhaps RDR will address such policies and behaviour, but if people are intent on finding ways around rules and/or choose to ignore risk, there is no absolute guarantee that consumers will be protected.

In one of my previous roles as a director of a Plc, one of the things that became a priority after we floated the company on the Stock Exchange was ensuring that we were aware of and complied with Corporate Governance standards. Most of the Combined Code is common sense, though it is interesting how many times large Corporations selectively ignore some of the standards if they don’t suite their company or personal goals. Alongside our ‘formalised’ application of the Code, we also took out Directors and Officers Liability Insurance. At the time, I didn’t even consider not doing so. However, it got me thinking about why I should feel the need to ‘insure’ the risk that my behaviour might not be up to scratch and another question that came to mind was why was it right that the Shareholders should pay for such insurance (as with most companies, it was a business expense). Ultimately, in extreme cases, we have seen some Criminal Prosecutions of Directors, but as with the dagger in the steering wheel, maybe one way of ensuring that Directors retain a focus on their own ‘moral compass’ is by not offering them protection funded by the shareholder (or maybe we should ask why they need it at all). Regulation can and does offer a degree of security and protection, insurance can provide some security in the event of failure. However, knowing what is right and wrong and applying that for the good of the consumer should severely reduce if not remove the need for such arrangements.