Market-wide analysis by Sesame Technology found that four specific user groups with differing requirements and widely varying adoption are emerging -- giving weight to the argument that providers must either ditch their 'one-size-fits-all' approach or technology will remain on the outskirts of the sector.
Sesame Technology has found that commonly-used IT-buzzwords like 'scalability', 'back-office systems' and 'open architecture' simply switch IFAs off and the insular tech-speak that technology providers have been guilty of spouting over recent years carries little weight. The research reveals that for the first time IFAs can be categorised into four distinct groups based on their IT skills and attitudes to technology; 'Fluent Fixers', 'Conversational Enthusiasts', 'Reluctant
Participants' and 'Techno Phobes'.
Compiled via a combination of face-to-face discussions with Sesame members and quantitative analysis of the wider market, the findings highlight the varying levels of IT literacy displayed by IFAs.
Stephen Young, sales director at Sesame, said the research threw new light on levels of understanding and capability among the nation's advisory community.
"We have found that not everyone speaks the same language when it comes to technology. While for some, IT know-how comes easily, for others it is far from smooth sailing. The research should serve as something of a wake-up call for technology providers and the wider industry which tends to treat all users the same, regardless of their technical proficiency.
"For many IFAs, technical skills are like a foreign language and support groups should be doing everything they can to ensure that all levels are confident incorporating technology into the ever-changing operating environment.
"With the industry facing pressures such as depolarisation and more stringent regulatory demands, there is an inherent need to stay ahead of the pack to ensure long-term profitability. Most are realising that technology plays an important part in ensuring a sustainable business model and are seeking to ensure their skill set is as up to date as possible, " Mr Young said.
Based on the dimensions of confidence and knowledge, IFA's attitudes towards technology can be broadly divided into four groups:
Fluent Fixers aren't afraid of technology and will persevere to get to the root of a problem. They are proactive and have a clear understanding of the fit of systems and understand why things don't work and how to fix the problem. Sesame Technology estimates that currently, 'Fluent Fixers' make up approximately 10 per cent of the IFA market.
Far more IFAs can be described as 'Conversational Enthusiasts'. Those in this group understand the importance of IT however they have difficulty achieving a solution and similarly communicating the problem. They are eager but have issues understanding technology. Sesame Technology estimates that approximately 30 per cent of the IFA community would fit
into this group.
Within this group, two clear tiers emerge:
Tier 1
Young and new to the industry, members of this group are getting to grips with the financial advice sector and systems that come with it.
Tier 2
Members of this group have been in the industry for some time. They have a strong client base and are part of a successful business. Where they fall down however is in competency with IT.
Encouragingly, they are eager to learn, but do not have the IT know-how of 'Fluent Fixers' and are keen for formal training and support. There is also a strong representation of females in this group.
'Reluctant Participants' make up the largest group in the market. These IFAs have more or less realised they have got to move with the times if they want to improve the running of their business. They have the same usage level as 'Conversational Enthusiasts' but have utilised technology begrudgingly. They can see the merits but find the experience at times rather problematic. 'Reluctant Participants' are happy to commit to regular training sessions but generally prefers face-to-face training.
Sesame Technology estimates that approximately forty per cent of IFAs identify with this group more strongly than any other.
A small trend also emerging among 'Reluctant Participants' is the view that technology has a low perceived value versus the price paid for it.
'Techno Phobes' are simply not interested in technology and do not see any need to change their current business style. They are well aware of the new regulatory demands being placed on advisers but are unwilling to adapt and become IT competent. The future is uncertain for this group however as most are aged 50 and above they are unlikely to change their
ways.
Sesame Technology believes that as many as one in five IFAs can be classed as 'Techno Phobes'.
Mr Young said that while on the whole technical proficiency was improving, there was still a great deal of work to be done - particularly when it comes to IFAs that fit into the 'Conversational Enthusiast' and 'Reluctant Participant' categories.
"While the 'Techno Phobes' have more or less made it clear that technology is not for them and are willing to continue operating as they always have done, a large part of the market does show a willingness to learn and improve on their limited capabilities. There will inevitably
always be a segment of the market that refuses to embrace technology but as technology providers we have a responsibility to offer systems that are as cohesive and user-friendly to all groups.
"For far too long technology providers have left IFAs and their support staff on their own to get to grips with complex technology solutions, without taking into account varying capabilities.
"Unlike other providers in the market, at Sesame Technology we understand the importance of supporting the user - whether they are 'Fluent Fixers' or 'Reluctant Participants'. As part of this commitment we are working with customer management teams to ensure that coming to grips with technology is not as daunting as learning a new language after all.
"We are consistently looking to improve our proposition for all areas of the market, particularly those IFAs that have difficulty grasping the logistics of e-business but are enthusiastic about learning."
