Network Review: How can Financial Ltd help you?

Financial Limited has a number of points of differentiation. It was the first network to start charging a flat fee per firm dependent on the number of advisers.

Moving away from a percentage share of commission was a bold move at the time but with the move to fee-based services it has proved to be insightful and one that several others have now followed.

Another point of differentiation Steve describes as “Treating members as grown-ups”. Steve explains: “Where possible we give advisers choice. We set the boundaries of how they operate but within those boundaries the firms decide how they manage their business end, which IT systems they use”.

Perhaps the most impressive differentiation comes in the use of technology to manage the risk of its business and the member firms’ businesses. Financial is the closest thing we have seen to an electronic network despite not mandating its members to use any front or back office systems.

The heart of the electronic network that is Financial is a system called Phossil. The system records all data that has implications to the compliance of the member firms. It is an in-house build and all the more impressive as a result.

Phossil stores files on each AR and adviser including a risk rating for the adviser that will drive the level of case checking and the level of supervision of the adviser. The risk rating in turn is fed by a number of factors such as the output from the case checking, qualifications, product types advised on, complaints and performance against KPIs.

Each of these factors is updated in real-time which in turn updates the risk rating, again, in real-time. As a result, the management of Financial and indeed of each member firm has an up to date view of the risk ratings of their advisers.

Host of data

The system also produces a host of other management data including KPIs such as; persistency, not taken up (NTU) business, average file check scores, spread of business and many more items of value in managing a distributor business.
Phossil also includes all the necessary business registers like Complaints, Gifts and Incentives, CPD activity and Financial Promotions. It acts as a document store containing all important documentation from sample Factfinds and Suitability letters to risk profilers and regulatory forms.

Reaching the required level of qualifications for RDR is a key concern for the network so they are also designing many ways to help advisers achieve the necessary standards. Steve is conscious there is a belief that several advisers will sail through the qualifications and another view that some firms (hopefully small numbers) will simply exit the business.

Steve believes it is the distribution firms in the middle who may struggle. It is these, he believes, it is vital for the industry to support in their attempts to get through the exams.

Financial is investing in training, by putting money where its mouth is and as part of this has acquired Insight from Redland which acts as a testing solution for members. Typically Financial creates all its own IT solutions but it needed a testing solution fast and was prepared to outsource it to a specialist.

In essence, Insight offers Financial a framework within which to sit all its testing questions together with content on key subject areas. The beauty of the solution is it is so easy to maintain that Financial has managed to become self-sufficient in adding additional questions and tests within the solution.

Electronic vision

In addition, technology is used to help achieve adviser requirements for annual knowledge testing. A question is sent out daily to subscribers under the heading ‘Daily Trainers’ or ‘DTs’. Financial has told us it has proven extremely popular, not only for members of the Network but also for advisers who have signed up for free via Financial’s website, keen to maintain their own knowledge.

Financial uses technology to link together all its compliance processes. The result is that firms and management alike get constant, up-to-date information on their business. This use of technology can produce efficiencies for both the network as well as its members and should not be underestimated. We applaud Financial’s electronic vision.