Data Sciences considers the timing more fortuitous than daring. When it quietly took its pounds 1,400 new package, Finale Consultant, to the Insurance Trade Technology Association at the end of last month, expecting the usual interest but no immediate take-up, it sold eight copies on the spot to independent financial advisers. Next week in Edinburgh it launches its bigger investment, the kernel software Prelude, to an invited gathering of representatives from the major insurance companies and trade bodies. The London launch follows the following week.
Prelude steps right to the front of the fray. It is designed to be used on portable computers by the people who go out and sell - the people who, in the case of Norwich Union, have just cost the company a pounds 300,000 fine from the life insurance regulator Lautro, and who have been suspended for four weeks for retraining and testing, while Norwich Union sorts out how much compensation it will end up paying to badly advised investors.
In launching Prelude, Data Sciences, which already has a firm foothold in the defence, finance, retail and public sectors, claims that it 'involves and informs customers throughout the sale process, thus restoring their faith in the sales person'. If it does this in the wake of miles of newsprint devoted to former members of company or state pension schemes who rue the day the sales person called, it will be worth every penny of the pounds 300- pounds 500 per copy it is likely to cost.
Data Sciences, however, recognises that there is a wider debate over the role of computers in the immensely personal business of buying life assurance and pensions. When it introduces Prelude to the press on Wednesday Andy Roberts, its chief executive, and Bill Ellis, head of its finance division, are likely to address stickier topics, such as whether computers are being used to lend authority to poor advice. They may also venture into whether computers can take over the sales person's advisory role and if they can, whether they should. By definition, however, they are bound to press the benefits, and if companies can save money by cutting administration in the long term, the march of computers is intractable.
Not everyone's experience of sales people bearing portable computers has been impressive so far. One independent adviser, keen to test the performance of his peers, commissioned 42 different reports on his own personal circumstances. 'Those who came with computers, quite frankly, struggled. It's not the independent financial adviser market that totes the computers around, it's the direct sales force, and it seemed to me almost in lieu of training, to replace it, instead of thorough product training and understanding by the salesman.
'Some of these things say, 'This guy has just said this, tell him so and so' - whereas the depth of information that needs to be considered to be able to give a full, honest, genuine 'health check' needs to be done properly - taken away and thought about. Use of computers at point of sale leads to the loss of personal contact with the client, loss of eye contact, feel and nuance.'
Three networks of independent advisers and others use an American product, Life Plan, which involves using old technology face-to- face interviews then having the results of a comprehensive questionnaire analysed by computer. Robert Gullen, chairman of Wellington Technology, the Cheltenham company that writes the reports with the help of Life Plan, says this combines a computer recommendation with sales skills.
'It makes a recommendation on a purely generic basis; the adviser uses his skills to select the product,' he says. 'The other thing the report does is tell you what you can't do. It's totally realistic, and this is where we'd be critical of a number of systems being taken around by some of the more aggressive point-of-sales people. They tend to ask a few questions and focus in very quickly on what they can sell.'
The accountants KMPG Peat Marwick fuelled the controversy over bad advice last year with a report saying that 9 out of 10 of the 500,000 people who had transferred their pension benefits from company schemes to personal plans since 1988 'could not be shown to have received best advice'.
Against this background Data Sciences claims that Prelude 'dramatically enhances 'best advice and suitability', helping to avoid a repetition of the epidemic of ill-advised pension transfers brought to light by the Securities and Investments Board'. The product has been 15 months in development at the company's base in Farnborough, Hampshire. Ray Sieber, business manager of financial services products, says Prelude fills the gaps other systems have left. These gaps, he says, have led half the sales force provided with portable computers not to bother with them.
'We found that 80 per cent of the major life companies had bought or built a computer system of a type. But of that 80 per cent, only 30 per cent had complete utilisation. The reasons were simple: some gave their sales force a computer and thought it would meet their needs, but the sales people thought it was impeding them, not helping. None of the systems was helping to develop needs and make a sale. We saw systems that did illustrations, systems that helped to collect the data for the fact find, systems that had wizard graphics, but none that covered everything.
'Most of the suppliers were greedy and had developed a bit of a product and said it would cost the companies a lot of money to make the product their own. There seemed no obvious reason to us why 95 per cent of the requirement was not common to all organisations. We developed something that was the 95 per cent, with a standard tool kit that enables the user to tailor
4 of the remaining 5 per cent.' Bob Ireland, industry marketing consultant of the independent Brunswick Financial Marketing, says Prelude 'should make it easier for the customer to reach the correct buying decision; and as we know, this is not necessarily the same thing as making it easier for the sales person to sell'.
Data Sciences says its package will keep users well within the Financial Services Act and can practically remove the entire problem from the insurance company's hands. In the current climate the companies may be pleased that there is someone apparently so happy to carry the can.
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