"DIY" approach to IT hits financial firms' revenues

A "DIY approach" to IT is costing UK independent financial advisers (IFAs) thousands of pounds a year in lost business, according to a new report.

The Future of IFA Technology by market analyst Datamonitor says failing IT systems are resulting in substantial losses through wasted financial adviser time.

That loss can be as much as £48,000 a year for a large IFA employing advisers and using in-house IT support, while the same IFA could also potentially lose £84,000 of business by relying on telephone call-out, instead of in-house, support.

But proportionately the loss hits small IFAs and sole traders even harder because of their "DIY approach" to IT. Datamonitor calculates these IFAs lose the equivalent of one working week per adviser per year at a rage of £60 per hour due to poor IT systems.

Mark Tucker, financial services analyst at Datamonitor, said the results of the survey shatter the myth that IFAs are technophobes but added that IT remains "a thorn in the IFA's side".

"On the contrary, the level of technology in the average IFA office in the UK is in-fact very high. However, IFAs are still suffering a great deal of lost adviser time as a result of IT failing them," he said in the report.

The survey, which canvassed 100 national, regional, network and sole trader IFAs found that those who use electronic submissions already expect the amount of business they submit online to more than double to 44 per cent by 2006.

A separate report into technology spend by IFAs by financial software vendor The Exchange, based 300 responses, claims IFAs will be transacting £3.2bn-worth of business electronically by 2009.

Over half (55 per cent) said they believe they will be conducting at least half of their business electronically in five year, with time savings cited as the greatest benefit and core driver.