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Suuqea seeks to boost IFA customer insight with Experian

01 July 2009  |  1606 views  |  0 Source: Experian

Financial intermediaries can now gain far greater insight into their customers, including a more objective and accurate valuation of their client portfolios using insight tools provided by Experian®, the global information services company.

Suuqea is now offering financial intermediaries a unique customer reporting and profiling service based on Experian's award winning Mosaic and Financial Strategy Segments (FSS) customer classifications. The new customer insight, evaluation and reporting service will enable financial intermediaries to obtain a more objective view of their customer base which is also a requirement of the current Retail Distribution Review (RDR).

David Cox, Managing Director of Suuqea, explained: "With the Retail Distribution Review upon us, IFAs will need to demonstrate better, objective understanding of their customer base as a prerequisite for offering financial advice.

"Not only will Experian's consumer classification tools provide IFAs with a more objective and insightful basis profiling customers but they will also help IFAs develop appropriate customer contact strategies. IFAs will also be able to develop competitive tariffs for professional services that avoid the trap of competing on price alone in a sector that is based on advice, service and long-term trustworthy relationships.

"For the majority of Financial Services intermediaries, client segmentation is a laborious and time consuming process with the added complexity of deciding what the segments should be. If the task is completed at all, the outcome tends to be subjective and heavily influenced by the length of time since the client was last seen and what products they have bought to date.

"By providing the names and addresses of clients and using Experian's client segmentation, profiling and mapping tools, it is possible for Suuqea to provide IFAs with a detailed and unbiased portrait of clients and their financial behaviour in a timely and cost effective manner."

Recent research by Ernst and Young suggests that as many as 10,000 IFA firms could cease trading as a result of the new reporting requirements from the Retail Distribution Review. This has a number of serious consequences, including:

· ud
· uding:

· Over 2m clients face the prospect of having to find a new financial adviser

If a Financial Services Intermediary understands their client base better they will be able to identify which types of clients they are particularly effective at dealing with and therefore gain a competitive advantage in attracting & developing new client relationships

· Many Financial Services Intermediaries will want to sell their businesses.

There are 2 challenges in this respect both of which will serve to reduce the perceived value of a business:

o There will be many businesses for sale which will drive down prices

o The traditional business valuation model is a multiple of renewal income. This has 2 main flaws, namely that many Financial Services Intermediaries will have taken commission upfront on Indemnity Terms therefore generating no renewal income. Secondly, that the current economic climate and low stock market levels will reduce the level of renewal income. In fact at the moment this is causing a block in the flow of businesses for sale.

David Cox concluded: "Experian's services have enabled Suuqea to provide IFAs with the means to offer a new way to value the lifetime relationship with a client. In order to do this it is necessary to have an unbiased analysis of a client bank thus providing the sellers, buyers and their professional advisers more of the information needed to conduct a robust due diligence process and agree on the value of a business.

"In addition there is an advantage for the clients in that this will create a more fluid market for Financial Services Intermediaries to be sold therefore contribution to an improved approach to the handover of client relationships."

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