For any adviser firm, regardless of size, which is looking to technology to help it deliver the best client service, appropriate due diligence should be undertaken, points out Rob Gagliardi, digital product and propositions manager at Bravura Solutions.
Selecting a technology provider may seem like a daunting task for an advisory firm but the process does not have to be onerous.
“Key to selecting a technology provider is to understand what you actually need it to do,” says Scott Gallacher, chartered financial planner at Rowley Turton. “All too often are we presented with snazzy technological solutions that don’t actually do what we, or advisers, would want them to do.”
In other words, suggests Tony Bray, head of business development at threesixty services, they should be carrying out the same process they would for any other significant change to their business.
He says advisers should be asking the following questions:
- What services do their clients need? And how do they want them delivered?
- How does the technology add to the client experience?
- How must it be delivered from a regulatory perspective?
- What’s available in the marketplace to assist with that? Is it of value?
- How can the firm exit the technology?
- Is the supplier committed, and do they run a sustainable business model?
High standards
For Steve Bryan, director of distribution and marketing at The Exeter, the key considerations for adviser firms looking to outsource to a technology provider should be around security and data protection.
There have been many high-profile examples recently of when security and data protection goes wrong.
TSB suffered issues with its online banking services in April 2018, which saw nearly two million customers locked out, as it began to move customer data from Lloyds Banking Group to its new owner.
“Advisers should ensure their chosen provider has the correct standards in place and that they are up-to-date,” Mr Bryan notes.
“Ideally, technology providers should be ISO 270001 certified – the international standard that defines the requirements for managing information risks, such as cyber-attacks, hacks, data leaks or theft.”
He adds: “They should also be part of the government-backed ‘Cyber Essentials’ scheme, which identifies the fundamental technical security controls that an organisation needs to have in place to help defend against internet-borne threats. As a provider, we ourselves are both ISO270001 and Cyber Essentials Plus certified, because the protection of our members’ data is incredibly important to us.”
Conor Murphy, chief executive of Smartr365, recommends: “Before selecting a technology provider, there are some key points that advisers should consider.
“It’s always a good idea to check for positive user feedback, for example, and to create a functionality checklist to determine what advisers really need versus what sounds good on paper. Advisers should also take some time to judge the size, scale, and credibility of any providers on their shortlist.”
A due diligence questionnaire may help firms to ensure they are covering off the most important areas before making a financial commitment and investing in new technology.
Ray McCarthy, head of distribution at AIR Sourcing, says he has received many due diligence questionnaires from large networks and adviser firms considering endorsing their software.
He adds: “While smaller firms need not replicate what is often equivalent to war and peace, their due diligence questionnaires usually look at eight main areas which you can adopt in considering technology for your business, whatever its size.”
