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Bringing it all under one roof

Ian McKenna discusses the need for client management software that caters for all of an adviser’s permitted activities

25 August 2007

A frequent complaint I hear from brokers is the need to maintain different client management systems for mortgage and investment business. Although it's nearly three years since ‘Mortgage Day', if an adviser business wants to operate using a single client database for all their regulatory activities, they are going to have to decide to adopt a system that specialises in either mortgage or investment requirements, with limited functionality in the other area.

While not all firms want to operate in the investment market as well as mortgages and general insurance, unsurprisingly, with the Financial Services Authority now regulating all three areas – even if it is not yet adopting a single regulatory process – more are looking at this option. However, running two systems in order to have the depth of specialism that is essential for each discipline is becoming a major headache, particularly for larger firms, given the obligations of integrated regulatory reporting.

Limited functionality

Before ‘Mortgage Day', most mortgage advisers had minimal client management systems, if any, and relied on the limited functionality provided by mortgage sourcing systems for any client records. Compliance obligations mean that this is really no longer a realistic option, and I am not surprised to hear that both MBL and Trigold are reporting strong demand for the key systems and Dashboard they acquired last year.

There are, of course, other specialist mortgage client management systems, notably MortgageStream from Digit8 and Momentum from Crystal Software. However, none of the mortgage-focused systems have been designed to meet the full needs of a composite adviser wanting to provide investment advice in addition to mortgages and protection. Conversely, while there are many specialist systems for investment advisers, of the market leaders Adviser Office from 1st Software, Intelligent Office from Inteliflo, and Quay's Client Care Desktop, offering elements of mortgage support; the reality is that loan products are the poor relation when compared with the depth of functionality they provide for investment businesses in these systems.

Indeed to take this argument a stage further, there is a need for systems that can also address the needs of more specialist general insurance advisers who get involved beyond the traditional ‘personal lines' type business in addition to other permitted activities. For now however, meeting the needs of the mortgage and investment firms in a single solution probably represents the largest opportunity.

Catering for all

The market needs client management systems that cater equally for advisers operating in either space. It should be possible to capture as much or as little information as an adviser needs, dependent on the areas of advice they have been asked to address by a particular client. In turn, such systems should seamlessly integrate to sourcing and research tools for mortgages, investment and general insurance, for product comparison and subsequently for electronic submission to lenders and insurers, as well as maintaining a full audit trail of activity for compliance purposes and maintaining all the information necessary for ongoing advice.

All these processes should be able to reuse data entered at any point in the process so that the same information never has to be keyed in twice. In my experience, this is an area in which lenders and life companies share a spectacular lack of understanding of how time consuming it is for advisers to constantly re-enter data. They really should know better; all too often they preach the benefits of so called ‘straight-through processing' while building systems that deliver benefit to their own organisations but create more work for brokers.

Lack of understanding

Based on extensive research I have been involved in recently, there is a fundamental lack of understanding amongst mortgage lenders of the sort of technology architecture advisers now need to run a fully compliant business. Against such a background it is hardly surprising that most lenders are delivering technology solutions that create almost as much work for advisers as they save.

In addition, systems ought to be able to manage case-tracking messages from both lenders and insurers so that the adviser can use a client management system at the heart of their business. It is impractical for advisers to manage case-tracking via a plethora of lenders' different extranets. This information should correctly be delivered to the point where the adviser is managing their client relationship without having to log on to a host of different services.

‘Treating Customers Fairly' is also driving ongoing involvement between brokers and their clients, and positive progress appears to be being made on keeping the adviser informed with the ongoing conduct of the mortgage. The composite client management systems will need to cater for this process in the same way as investment systems address ongoing client servicing.

Regulatory compliance is a massive driver for the adoption of client management systems, but software companies need to recognise they must be able to cater for the needs of all the permitted activities covered by a firm.

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