If someone had asked me to write an article on back office systems three or four years ago, I think I would have passed and chosen a more interesting subject instead: the merits of watching paint drying, or trainspotting for beginners perhaps?
But over the past few years, as back office systems have evolved, particularly with the addition of front office functionality, my perspective has changed. In hindsight, I would have been wrong to be so dismissive.
Looking back just a few short years, advisers often used a back office system begrudgingly, often perceiving it to have limited value to their business.
In many cases, it was simply a place to hold Know Your Client information, a method of reconciling fees and commissions, and an online document repository. There were also of course, and still are, a percentage of advisers not using a back office system.
Fast forward to 2016, and with the Retail Distribution Review firmly in the rear view mirror, back office systems have evolved considerably to the point where effective adoption can catapult an adviser’s business to another level.
Of course the converse is true, advisers who do not put a back office system at the heart of their business, while embracing new front office technology, will be left behind.
Let us start with a definition of front and back office. I’ll go with Wikipedia: “A front office application is any software that has a direct relation to customers.
It provides functionality and the data necessary to take orders, configure complex products and effective service and support to customers. In turn, a back office application has no such direct relation. It provides functionality for internal operations.”
To put it more succinctly, I will define the front office as the part the client interacts with and the back office as the functionality used by the adviser.
As the functionality of back office systems has improved over the past few years, with far more front office, that is, client-facing functionality added to most propositions, such systems should be the beating heart of any advisory business.
Consider, for example, how the advances we have seen over recent years, can help to achieve the twin goals of improving efficiency and the client experience.
I do not know an adviser who does not want to work more efficiently; the adoption and effective use of a back office system is fundamental to achieving that goal.
From collecting basic data, through to risk profiling, product research, cash flow planning and suitability confirmation, the back office system should support the advice process every step of the way.
Of course, many of these tasks, for example cash flow modelling or fund research, are best done by specialist software designed specifically for that task. The efficiency lies in the integration between back office and specialist software, removing, for example, duplication of data entry.
