The future in your hands

Hand-held electronic devices will soon surpass even desktop computers in the delivery of information to consumers, says Ian McKenna, director of the Financial Technology Research Centre

One of the most popular sales acronyms in the bad old days of hard sell life assurance was KISS, Keep It Simple, Stupid. Take the pressure and large up front commission out of the sale and many of the techniques employed in the past were in fact based on very sound logic. They still deliver valuable lessons in the 21st Century. Whilst many in the industry would choose to believe that consumers will still prefer to deal with advisers face to face, in reality, even without the increased cost that consumers will inevitably occur should the FSA proceed with their plans for adviser charging, consumers are increasing managing their lives using digital devices such as mobile phones and iPad.

Tomorrow’s successful businesses will be those who deliver the information their customers want, when they want it in the way they want it. If organisations fail to meet such needs consumers will simply seek alternative suppliers.

While this industry may be dominated by ageing baby boomers who prefer their ways of working, the reality is that the baby boomer generation has now passed the zenith of its power and influence. Political power in this country passed to Generation X in May and the same change took place in the US in January 2009.

It is important to recognise that such devices include not just mobile phones, but also reading devices such as the Amazon Kindle and an increasing range of games platforms. In practice these devices are driving technology convergence at an even faster rate. As an early iPad adopter I had expected the experience to be more an indication of where the technology might go in the future. The reality has become very different, with the device rapidly making my laptop redundant for many tasks.

As I have stated previously on these pages, one of the main challenges to organisations wanting to compete with Nest is to make it easy to do business with them. Mobile applications provide an excellent way to do this. Although it is early days firms who are making an investment in this embryonic sector have the opportunity to gain valuable experience in what will, without doubt, become a crucial distribution channel.

An excellent example of this is the new Pension Modeler iPhone App launched by BenPal, the benefits management system from JLT. The initial release of this can now be downloaded from Apple’s App store. The first release is a generic calculator that enables the user to input their personal information, date of birth, gender salary, own and employer’s contribution limits, values of current and other plans to arrive at a pension projection. This is then represented graphically showing the level of annual pension and tax free case.

While this industry may be dominated by aging baby boomers who prefer their ways of working, the reality is that the baby boomer generation has now passed the zenith of their power and influence

Users can simply drag the labels for either option to change the values shown. This dynamically alters the level of the members contribution necessary to reach the desired target. Alternatively by touching icons for retirement age, individuals contribution and tax-free cash, users can then increase or decrease these values by pressing plus or minus labels.

A second results page, which is reached by sliding a finger to the left on the first results page, summarizes the annual pension, tax free case, income as a percentage of salary, projected fund value, projected salary, fund as a percentage of lifetime allowance, net cost of monthly contribution, tax relief level of employer contribution and total contributions as well as replaying the assumptions and annuity options included.
To be fair, none of this is rocket science and many traditional websites will give the same information. The important thing is it is being delivered over the market leading mobile platform. The simplicity and ease of use are excellent. In delivering this App BenPal is providing an excellent showcase for its overall service, which based on a recent opportunity I was given to view the system is, I believe, one of the best in the market

Anyone who has an iPhone should download this App to get a feel for what is an admirable example of delivering a simple solution using this technology. I understand the next version will have the ability to interact with information from their live service for BenPal customers and I will be watching this with great interest.

BenPal is one of a handful of players who are increasingly using technology to achieve a major advantage. Any adviser that wishes to remain competitive in the benefits market needs to follow its lead.