No longer considered exotic, the online world is fast becoming the basis for the sale of financial products. David Child gives a few pointers to protection advisers.
Isn’t it funny how mobile phone companies don’t mention voice capability anymore – instead choosing to focus on the integrated ‘sat nav’ application or the ability to update a Twitter status from the Kalahari Desert? Similarly, the newest PCs and laptops come with built in Skype so, ironically, no typing is even needed when contacting friends or family members. Even some of the smaller life offices and friendly societies – traditionally regarded as being on the trailing edge of e-commerce – now have all-singing, all-dancing extranets. “The times they are a-changing.”
Fortunately, the past few years have also seen most advisers’ mindsets evolving rapidly alongside the technological advances and many firms are now starting to recognise the benefits the burgeoning ‘online’ market is bringing. Not only does it offer increased cost efficiency compared to the burdens of paper-based administration, but importantly it also presents a very tangible opportunity to provide a competitive, multi-channel distribution, ahead of the 2012 RDR era.
Nowadays, the sheer volume of products being compared, quoted and purchased online is reaching record levels. And, when such a service is offered alongside the traditional advice-based business, it really does give a ‘best of both worlds’ scenario.
HIGH END ADVICE
While there will always be a need for pure ‘high end’ face to face advice, offering web-based sales and servicing to less ‘affluent’ clients or more sophisticated, execution-only clients, is becoming increasingly important. In fact, e-commerce is without a doubt the fastest growing distribution channel in the financial services market place.
A study by Norwich Union backs this claim further by announcing Britons spend 180 million hours each year researching essential financial products, with more than three quarters of car insurance buyers (76%) going online before they buy. A survey by YouGov also found that 94% of the internet enabled consumers to seek some kind of advice online; with 43% looking for information or price comparisons on savings, 23% mortgages, 22% investments and 13% for advice on pensions.
With pressures on time and money – especially in the current economic climate – it is hardly surprising that this surge in virtual advice is fulfilling the desire for the quick fix ‘martini’ solutions – available anytime, anyplace, anywhere.
So, with price comparison sites eating into some distributors’ market share at an alarming rate, what is a professional adviser to do? Well, to quote a very wise meerkat – ‘simples’; play them at their own game. Using a web-based distribution channel, adviser firms can capitalise on the often smaller ticket but higher volume sales opportunities by servicing a new and expanding target market. And, with over 16 million UK homes now accessing the internet, this represents a lucrative and powerful proposition.
Reassuringly, many advisers are already realising this need for a strong online business presence and according to a recent 1st – The Exchange poll, in the run up to 2012, more than a quarter of all intermediaries are ‘definitely considering’ a web-based or guided sales model.
For those firms who intend to continue writing profitable life and general insurance business however, a solid, reliable infrastructure, underpinned by proven technology is a must. In the first instance, to compete against sites such as ‘gocompare.com’, ‘confused.com’ and ‘moneysupermarket.com’ it will literally mean ‘grabbing’ the clients in the internet search engine race. Therefore doing this in a fast, efficient, professional and importantly, on a prominent website is vital.
SEARCH ENGINE FRIENDLY
The key starting point is to make the web pages search engine friendly so there is a greater chance of climbing up the results ladder. As around 80% of first time visitors will come via one of the major search sites, such as Google or Yahoo, the repercussions of not doing so will be significant.
Similarly, the ‘snap shot’ company description must be informative but concise – clearly setting out the nature of your business, enabling the reader to make an instant judgement on whether they want to click for further details. The web address should be on all stationery and the content continually updated to entice clients back on a regular basis.
Providing an interactive and possibly transactional site may also encourage those with a ‘financially nervous’ disposition to be encouraged to seek help when they would not normally do so. In turn, providing prompts, tips, advice and easy to follow guidance throughout the whole process will go great lengths in helping to re-gain consumer confidence, not only in products and knowledge, but in the industry as a whole.
LifeSearch is a very good example of a forward thinking company one step ahead of the game. Recently unveiling its innovative new website GetLifeRight, it offers consumers the first chance ever to buy protection products with advice and get instant cover in less than two minutes.
On a similar vein, Hargreaves Lansdown has also been very successful in providing a well established sales-based channel alongside its more traditional advice business – with client numbers on its web-based Vantage ‘supermarket’ platform increasing from 252,000 to 264,000 over three months alone.
Financial advice firms can also buy a complete white-labelled solution which will create an end to end retail distribution channel through their own website. Customising an already-developed ‘off the shelf’ solution can provide a fast and efficient route to market and in addition to the usual online quotation, and online application services, the newest offerings can also provide seamless and integrated links to back office systems, central databases and even call centres.
Support for this type of product is also a very important aspect when the likely hours of operation are outside those that would normally be provided by a standard software provider.
The Click Group is probably one of the best cases in point, delivering a completely integrated online distribution channel. Each visitor to the Click website is allocated a personal telephone-based sales assistant and a competitive choice of online quotes, before being taken smoothly through the purchase process. Even complex underwriting decisions can be dealt with seamlessly with the help of the integrated Exweb portal technology that links directly to the main provider extranets.
Interestingly, a financial services benchmarking report from last October claimed the industry is missing out on online sales opportunities by failing to provide visitors with easy access to human contact. The research mystery ‘shopped’ the websites of over 100 financial services providers spanning mortgages, personal pensions, insurance and loan products.
The results revealed that while 92% clearly displayed a telephone number, just 14% provided a ‘call me back’ facility and only 3% offered a live instant chat option. Surprisingly the highly competitive motor and home insurance sector were amongst the lowest, with only 12% of the websites viewed offering a return call option.
With consumers often making multiple searches when trying to find suitable financial products the ‘call back’ option significantly increases the chances of turning an enquiry into a sale, with claims in the report that it can actually increase conversions by 250%.
Given the industry’s competitiveness, the need to stand out from the crowd is imperative. Whilst the online option is certainly needed for the growing internet savvy generation, clearly from the stats above there is still a desire for the personal touch. For protection specialists particularly, a website should be there to complement the existing business, not replace it completely.
Once enquiries have been made, basic contact details should be captured and sent through to the sales team for a follow-up so the process can be completed. This is another area where Click has really got it right. As a policy progresses through to being placed on risk, customers can automatically receive updates and confirmations electronically – via emails or text messages.
KNOWLEDGE IS POWER
Knowledge is power as they say. By providing consumers with notification of what to expect at each stage of the process brings the purchase of a financial product in line with a full internet retail buying experience. When awaiting a purchase from Amazon for example, the order status can be easily checked to find out when the product is likely to be despatched or if indeed there are any delays – offering a more ‘transparent’ shopping experience.
Whilst going down the non-advice route may initially seem like a scary proposition, the technological solutions coupled with the changing market means launching a web based distribution channel can be a much easier task than first imagined. In fact, 40% of firms surveyed for a ‘Future Distribution White Paper’ actually saw this as the way forward. Just remember to ensure that any distribution orientated website does not become part of the internet wilderness, that can only be found by hardened explorers – and instead is an easy to use and active contributor to bottom line results.
