Advisers need products that are straightforward and easy to arrange for their clients. Why is it then that some products with similar features and benefits are easy to arrange, while others are less straightforward?
The key is for product providers to build product administration and customer service into a product at the outset. If a product has been designed with simple administration in mind it will work far better than a product where admin is an afterthought in the design process.
Smart providers are now engaging specialist Third Party Administrators (TPA) early in the product development process. There are five key factors for providers to consider in developing easy to administer products – by looking out for these attributes, advisers will be able to select those that offer straightforward administration for their clients.
Start with the stakeholders
Simple administration needs to be built into a product as part of the development process. Once a TPA has started to build the administration system, it can be time consuming and expensive to make changes.
An effective approach is to bring all the stakeholders together at the start to agree the exact requirements. This could include the product provider, financial advisers, the TPA and other specialists such as compliance officers and adviser trainers. Each party will be able to bring a different perspective to the new product. Advisers will know what features are attractive to clients and which are unnecessary. The TPA will bring broad experience of administering others products and will know what works well, while the compliance specialists can ensure that all online information and forms meet the regulators’ requirements.
Keep it simple
It is easy for providers to overcomplicate products by adding features and benefits which sound attractive on paper, but are rarely used by advisers. These could include features such as guaranteed options, phased divestment, waiver of premium benefits or others. Each additional feature adds a layer of complication to the administration system and lengthens the application process.
By starting with a simple product model and only adding relevant or essential extra features, providers can ensure that the advice and application process is as simple and straightforward as possible.
Keeping products simple extends to product literature too. Complex products are hard to explain to clients, especially when overly legalistic jargon is used. Specialist TPAs have broad experience of developing easy-to-follow literature which is written in plain English.
Plan the customer journey
Nowadays the majority of new product applications are made online. All too often the application process is long and complex, with multiple questions requiring re-keying of information. This is usually because the process has been designed to replicate an existing paper-based application, rather than starting from scratch. In most cases the information needed by the provider and TPA is relatively simple. They rarely need all the information that you will have captured as part of your Fact-Find and KYC – although all too often this is duplicated in the online application.
Specialist TPAs can work with providers to design an online application process that only captures essential information and provide clear signposting to explain the steps to be taken. This makes your job as adviser far simpler, leaving you to concentrate on providing professional advice rather than entering data into complex online forms.
Be today’s news and not tomorrow’s chip paper!
When market conditions change, or new regulations are introduced which mean that product specifications need to be changed, you need access to new products quickly to be able to provide the best possible advice to your clients.
Specialist TPAs can help providers to launch simple products very quickly; often in just a matter of weeks. This is far faster than most providers could achieve using their own resources. By keeping an initial product launch simple, or running a product pilot, providers can be first to market. Refinements can then be made in later releases in response to feedback from advisers and their clients.
Become the customer
Many protection products once set up will not be looked at by your client for a long time. In reality they will only look at a product such as an income protection policy if they need to make a claim. Even investment products may accumulate for many years without any changes being made. This means it needs to be simple for you and you client to make changes to the product after a gap of many years. Specialist TPAs can help providers to keep their administration systems current and simple to understand, so they work effectively even many years after you first advised on the product.
Financial advisers need products that are straightforward and easy to arrange for their clients. By working together with specialist TPAs, providers can develop products which meet your clients’ exact needs as well as being easy to administer.
Stuart Ward is head of business development at OPAL