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Advisers need to grasp tech nettle or be left behind

Financial advisory firms need to accelerate their online client engagement and use of technology to establish their place in a market which has become increasingly polarised, according to Lucy Frew, recently-appointed head of financial regulatory at law firm Kemp Little.

Speaking to FTAdviser, Ms Frew said that firms will be looking at the pros and cons of how to utilise technology in their business models, which may split the market between those able to specialise in high net worth clients and other left to develop services for a mass market less willing to pay for advice.

The Financial Conduct Authority has been pushing forward into this area, and Ms Frew believes there are set to be “sweeping changes” that will create a battle for the middle ground.

In order to remain competitive, advisers will need to be proactive in terms of technology adoption, according to Ms Frew.

She said: “Client demand for online financial access is causing a shift towards more direct and immediate interaction with products and services.

“We see that while some businesses are grappling with how best to compete with new technology based business models, reinvent themselves and bring technology up to speed, others are already well along the path to executing business plans that capitalise on the current and incoming regulatory changes.”

In July the regulator published a guidance paper introducing several shades of grey to the previously black and white world of automated advice. It warned that online advice services cannot rely on falling under generic advice rules by using decision trees as a key element of their processes.

Many firms have been struggling to navigate the options in between simplified advice, limited advice and sales without personal recommendations.

For advice to be regulated, the FCA stated it must relate to a specific investment and must be given to the person in their capacity as an investor, or as agent for an investor, and relate to the merits of them buying, selling, subscribing for or underwriting an investment.

The FCA’s Project Innovate was also set-up to drive different forms of advice that engage with the so-called ‘advice gap’ left by the Retail Distribution Review.

During a Treasury select committee meeting this week, Martin Wheatley, chief executive of the FCA, said: “The market is dynamic and ever changing, and there are a number of smaller organisations looking to launch into the market.

“We are also seeing a wave of innovation, as well as financial technology and innovation, and we are trying to encourage this.”

More effective use of the information received when engaging with clients and potential customers online and over social media is another way advisers can take advantage, according to Ms Frew.

“In retail markets, growing consumer online activity enables firms to use consumer data more to price and market their products, and target virtual guided sales. As these capabilities improve, issues around privacy, access and affordability could become more prevalent.”

See article at http://www.ftadviser.com/2014/09/11/ifa-industry/technology/advisers-need-to-grasp-tech-nettle-or-be-left-behind-mfKO2iBcH7RNXtPfnni1lI/article.html

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company: pfireStorm
address: 21 Alexander Drive
Winston Park, Gillits
tel: +27 87 474 2200
fax: +27 31 764 4090
website: https://www.pfire.co.za


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Cindy Buxton
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Company Profile


    Pfirestorm is an affordable internet based service that organisations are able to offer their clients that will result in the cementing of existing relationships and/or the establishment of new relationships between the clients and the organisation.

    This service is CLIENT-CENTRED and simultaneously provides the organisation with a platform that addresses fundamental business matters such as strategy and wealth creation, operations and practice management, compliance issues, day to day matters, vast Marketing opportunities, leveraging IT in a unique way, staff incentives and measurements and impact directly and indirectly on your income flows from day one.

    The purpose for this service is to enable organisations and clients to be able to reach out to one another in an environment that is transparent, promotes shared responsibility and facilitates relationships providing mutual benefit for the client and the organisation.

    It is no longer a matter of who you know! It is who knows YOU!

    It is time!


Pfirestorm’s unique collaborative technology will enable our clients to deliver a branded and unified sustainable experience to their customers at all levels of their organisation, through programmed alignment of internal procedures and processes with their Customer Value Proposition.

Our clients will experience the power of a programmed behavioral system designed to sustain, facilitate and deliver to their clients, a distinctive Customer Value Proposition resulting in increased new and retained customers that can be measured in terms of higher production outcomes, reduced operating costs, focused employee and customer activities, customer services that exceed expectations, business continuity, and ultimately good corporate governance aligned to a dynamic regulatory environment.