New research among UK financial services organisations and financial advisers reveals that 57% of product providers feel the focus on sales for account managers representing product providers has increased despite regulation designed to shift a focus from sales to overall quality of service.
In contrast, 67% of advisers now place greater emphasis on broader market support from account managers and nearly half 47% believe relationship management is far more important than product selling.
The research follows in the wake of the Retail Distribution Review (RDR), which has placed greater emphasis for advisers on long-term business models and the quality and value of client interactions. This means product providers need to ensure they are matching this with effective and supportive account management services.
However, the research showed that advisers are still three times more likely than providers to think overall attention to quality of service is one of the most important elements for good account management (70% versus 23%), showing a potential difference in approach.
The changing needs of advisers offer the opportunity for providers to improve their relationships with them through new business models. Two-thirds of respondents (65%) felt that providers and advisers could work together in a more cost effective manner. This shows that providers need to find new ways to engage with advisers more effectively on a service basis while still distributing the right products to consumers.
Outsourcing sales and business development functions may be one such solution. The research reveals that outsourcing is already an important feature for product providers, with 57% currently outsourcing at least one part of their processes. In addition, the majority of providers (83%) believe that outsourcing of sales and business development based on high quality business partnerships will grow within the next five years and 74% of product providers are aware of other companies who already do this.
Angus Maciver, CEO, McCurrach, said: “The research reveals a potential challenge for financial services product providers. To provide the best service to advisers, providers need to take the opportunity to respond to the needs of advisers and find ways of ensuring a cost effective and high quality support framework. For some this will mean taking a fresh look at their current intermediated sales model."
Robert Wood, financial services director at Ernst & Young (E&Y) commented: "The survey confirms E&Y's belief that product manufacturers need to provide a value-add, personal service that is genuinely helpful to intermediaries not just a product push, which is far less relevant to intermediaries post-RDR. By its very nature this requires good quality, relatively expensive people in a market that is increasingly price competitive. Providers will need to look for more efficient ways to provide the required level of service so we may see increased use of outsourcing, franchising and ultimately sharing of resource."