All that we survey

When the possibility of trading insurance over the internet was first raised at the end of the 1990s, the broking community responded with scepticism. Consumers were still wary of purchasing online because of the security issues, and no one was sure whether it would take off. Some brokers approached it cautiously, offering online quotation services but following enquiries up with a phone call from an operator to complete the sale.

There are constant references to research into consumer buying behaviour, however, there is little mention of who sell and advise on the ever-increasing range of financial services products.

Intermediaries account for the lion's share of how financial services products are distributed and subsequently purchased, so why is more time not spent gaining an insight into their specific needs, desires and concerns? After all, they are the ones with the responsibility of recommending appropriate choices for customers, offering invaluable insight on two separate levels - customer and distributor.

In a bid to rectify this situation, Norwich Union Healthcare conducted its first Intermediary Health of the Nation research in October 2005.

Designed as a listening tool, the survey asked for intermediaries' views on their health and lifestyle, their attitudes on their chosen career and the industry in general. This UK-wide research examined the opinions of over 470 intermediaries of all ages and backgrounds, to ascertain how healthy they were and the key sources of pressure in their working lives.

The survey highlighted some interesting findings, not least that some of the stereotypical views - traditionally held by both product providers and consumers alike - still hold true. For instance, the research reflected that the intermediary population is predominantly composed of males aged 35 and over, with fewer than 20% of respondents being female, and only 10% of respondents aged between 18 and 34.

These results in themselves will not surprise many. They could even be seen as a bit of a joke, were they not viewed in the context of the rest of the findings and the implications this, and the current composition of the market, has on the industry as a whole.

The research has proved an enlightening and valuable exercise and the results may challenge, or perhaps confirm, some of the views shared by many intermediaries.

The survey highlighted that more than one quarter of the respondents indicated a low satisfaction level with their work/life balance. A major contributing factor to this was the fact that they regularly work more than a 50-hour week, coupled with an ever-increasing amount of time spent on administrative tasks rather than face-to-face with their clients. Shockingly, they specified that on average they spend more than 43% of their working week on purely administrative tasks, compared to only 24% with clients.

With the introduction of regulation to the general insurance and mortgage markets, and a tightening of legislation in the life and pensions markets, increasing amounts of time are spent away from client-facing tasks. Regulatory and compliance responsibilities eat up on average 22% of their working week. This would not be so much of an issue if intermediaries' business models were not based on the premise that the majority of their time should be spent in front of clients; but for many they are faced with the stark choice of re-thinking their business models - or in many cases even considering leaving the industry.

With so much consolidation occurring in the intermediary sector, the need to drive incremental business from an existing portfolio and retaining clients is paramount.

As well as ensuring they maximise value from their existing clients, intermediaries also need to start thinking about how they utilise real savings, for example, with electronic new business, e-commissions, and by leveraging efficient tools such as interactive underwriting services. It may seem obvious but by working towards more joined-up processes, intermediaries are trying to ensure that they spend less time on administrative tasks that waste their expertise and time.

In addition, for certain sectors - such as the corporate market - where there has been a trend towards a consolidation of financial planning needs, intermediaries need to consider broadening their offerings to package total solutions. In time, perhaps this will get to the stage where total platforms are easily accessed, as well as workplace technology being available. This would be a bit like wraps, where an intermediary's data and clients overall financial needs will be contained in one place, and regulatory and administrative tasks will be automated.

With the ability to access and view an entire financial portfolio, and with automated updates from product providers, intermediaries will be able to constantly monitor their clients' portfolios to check they are meeting those ever-changing needs. Perhaps most importantly, they can then truly focus on the service and advice they give their clients, while securing their long-term remuneration due to the consolidation and management of the client's assets.

Longer hours and comparatively more challenging revenue targets have consequently meant that a number of intermediaries have considered leaving the industry. The Intermediary Health of the Nation survey highlighted that 40% of respondents have considered leaving the industry in the past 12 months, rising to 45% for those aged under 35. Again, this would not necessarily be a problem in itself, were it not for the difficulty many intermediary firms are having in attracting new and retaining experienced and qualified staff.

Given that there are ever-increasing revenue pressures on firms - for many, even achieving break-even is not without its challenges - many intermediaries have had to re-think the age-old problem of how they can cost-effectively attract new trainees. This is due to the need to ensure they have a role within the business that at least in part enables them to pay for themselves.

There are a number of alternative ways of doing this, and new ideas are being seen all the time. Gone are the days when graduates aspiring to the heady heights of becoming brokers would be sent off to a large corporate or even a direct sales force to get trained.

The most obvious route has been facilitated by the growing opinion that customer service must be at the heart of the intermediary business. This route is where qualified advisers with experience front the firm and provide the face-to-face dialogue, with para-planners sitting behind them to research and analyse the products and services available. This has the net effect that trainees can become para-planners and are part of the total client service proposition. Some firms will also charge for the para-planners time, so truly delivering value to the business. This offers a clear career path to the trainee, while enabling them to become qualified and gain confidence and experience at the same time.

The constantly evolving suite of professional qualifications and support for specific areas of expertise, such as investment, protection or employee benefits, allows individuals to select a more focused route to becoming an active adviser. Within the business, they can offer valuable advice and support to non-specialist advisers and can start developing their own client base via referrals and joint-venturing with other brokers.

Lack of professional development, particularly amongst female respondents, was also cited in the survey as a cause of dissatisfaction as a whole. A total of 12% of female respondents said they were dissatisfied with the lack of professional development in the industry - something that a number of industry bodies are trying to rectify.

The Chartered Insurance Institute has recently launched a new faculty to help companies drive up standards of professionalism and good practice and, therefore, benefit from enhanced consumer confidence. This is in addition to the CII's introduction of the Chartered Financial Planner status, which has been seen as a milestone in the industry's drive to improve the status of financial advice, meaning the public will be able to call upon the service and recognise the value of suitably qualified professionals.

It also becomes clear that this is an area where product providers can play a part. As products become more similar, service, technology and developing joined up and mutually beneficial relationships with intermediaries will become ever more important. Norwich Union Healthcare has taken a first look at what intermediaries need and want. It is now up to providers to respond in a timely and relevant fashion.