Planning won't get stuck in Web: Foley
The recent explosion of the Internet and the growth of online trading present two faces of new technology, according to Chifley Financial Services product management and marketing general manager Peter Foley.
The recent explosion of the Internet and the growth of online trading present two faces of new technology, according to Chifley Financial Services product management and marketing general manager Peter Foley.
Foley says the Internet has the potential to be a threat and an opportunity at the same time, and the outcome depends upon how financial planners make use of the technology and e-commerce.
"E-commerce will not eat into business for a financial planner," says Foley. "The issue holding it back is, are people prepared to trust a voice on the phone or person behind an e-mail with larger sums of money?"
Foley says that issue will need to be overcome.
However, he believes that fund managers will make use of the Internet to create easier and closer working relationships with financial planners.
"If clients go direct to a fund manager, then advisers are going to be unhappy. And if fund managers seek clients directly, they cut out the financial planner and any goodwill and future business," Foley says.
"This can be dealt with by using branding online. Fund managers ensure the plan-ner stays close to clients and those who wish to contact the fund manager can do so through the planner's site."
This allows both planner and fund manager to track Web site traffic, products that interest them and who has referred them to the site.
Co-branding will become important also as planners will be able to offer a wide range of tools to clients, while fund managers will be able to offer a wider range of services.
The other important aspect of the Internet, according to Foley, is its reach in terms of distance and customer impact.
He says most planners are distant from fund managers and clients. The Internet allows direct contact, which simultaneously breaks a planner's market into units of one.
"The Web is great for capturing and screening information to streamline products for a market based on the data," Foley says.
"E-commerce has been successful at the low-touch end with non-complex transac-tions. However, people using e-commerce at the high-touch end have to face greater complexity, regulations and taker higher risks, which plays into the hands of financial advisers."
Foley says the Internet is already moving towards this side of financial plan-ning as a support and sales mechanism.
"So far, the Internet has mainly been used in a support role but that will change to a greater sales role in the future as its presence in the industry in-creases," Foley says.
"It will end up going over all boundaries, with customers using offshore fund managers and advisers, but the reverse may also happen. The threat and opportu-nity of the Internet is that everything is only one click away."
AUTHOR
Jason Spits
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