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Web Exclusive: A Home Base In Cyberspace

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Web Exclusive Articles

Link to September 2001 Articles

By Jim Robinson, RHU, CLU ChFC, CFP, MSFS

Advisors doing business in cyberspace--not merely prospecting, qualifying or announcing their presence on a virtual billboard. The day when insurance and financial advice will be given online is coming. It's now merely a question of when.

Editor's Note: For an industry that makes a living from informed speculation, Advisor Today rarely has a speculative article submitted to it. This is one of those too-infrequent instances. Jim Robinson has created a richly imagined near future for insurance and financial advisors. Like all good prognostication, it roots itself in basic fact and then follows its own logic into uncharted, sometime dangerous waters. (For instance, those who favor commissions instead of fees will find not a lot to cheer for here.) It is, however, always an exhilarating and thought-provoking trip. Too many advisors are either suspicious of, or daunted by cyberspace. And many others are simply in hunkered-down denial.

However, the spirit of Mr. Robinson's piece is the Zen-like and very reasonable strategy of going with the flow when confronted by an unstoppable sea change. Ultimately, the precision of his predictions is less important than the fact he has laid plans for an unforeseen future that nevertheless is looming in front of all of us.

Advisor Today prides itself on keeping readers up-to-date on best practices. Mr. Robinson's piece reminded me that this magazine should occasionally celebrate the best horizon-squinting. And, assuming other practitioners choose to submit their own "imaginable futures," we will . . .

— Kevin Sheridan.

Financial service practitioners will need to control the cyberspace in which they share and collaborate highly sensitive information if they are to use the Internet as a tool to manage and grow their practices.

Existing Web-based applications, such as email, text chat, instant messaging and screen-sharing, do not address the need for interactive multimedia communications. In addition, Web-based conferencing tools, training applications and presentation solutions address only a small portion of the real-time interactive communications needs of the financial service practitioner.

As it stands now, the use of the Internet could lead to breaches of confidentiality, resulting in lawsuits, loss of professional designations and the demise of a practice.

Financial advisors need to create a truly global online environment that allows them to grow and expand their practices.

An idea whose time has come

But why build a global practitioner community that's purely a financial services technology and communications company? Why do financial practitioners need a special financial cyberspace highway and e-tools to facilitate their e-commerce activities?

RealGlobal.com must deploy more than passwords. Its security must use several hacker- and virus-resistant strategies.

— Jim Robinson, RHU, CLU ChFC, CFP, MSFS
Sidebar: Loose Talk about Tight Cyber Security
More Web Exclusive Articles

Consider America Online, the world's leading Internet service. AOL has 24 million members worldwide, 1.2 million subscribers who use the service at peak times, 110 million emails daily, 200 million stock quotes daily, 5.2 billion Web URLs served daily and 64 minutes of online activity per member daily. (These statistics do not include AOL's other Internet services like CompuServe, Digital City, MapQuest, MovieFone, Netscape and Spinner.)

These AOL numbers represent more than 25 million online users across a wide spectrum of work and life styles. (And this does not include the millions of users from other online services.) Why would these online users leave the comfort and convenience of the Internet to seek an advisor by phone or in person? One could answer "Because they have to," but soon this may not be the case.

Financial advisors need to build a special cyberspace highway with collaboration and e-commerce tools that aid in communication with clients, prospects and peers. This global community would facilitate financial planning, product planning and cutting-edge client service. Such a community must be user-friendly, allowing the financial service practitioner to focus on his core competencies while offering technologies that relieve him of the worries of creating and maintaining a secure website.
The mission of such a website would be to be a global medium as central to the financial practitioner's business as practice management, sales software systems and the telephone.
For the purposes of this proposal, let's call this online community RealGlobal.com. (The name is fictitious--it is used here simply for illustration purposes.)

Rules of engagement

But RealGlobal.com can be as easily defined by what it does not do as by what it does do:

Selected pages with heavy traffic would carry time-sensitive and topic-specific links to industry websites and online magazines. The Web page featuring these links would carry the following message: "RealGlobal.com maintains that 'content' is better left to the experts. The focus of RealGlobal.com is stellar Web-based collaboration for financial service practitioners. This is our core competency."

A true B2B collaborative site

RealGlobal.com has to be a true business-to-business and practitioner-to-practitioner site. It would provide collaboration tools to enhance communication among practitioners as well as communication between practitioners and their customers. These areas of communication would include:

RealGlobal.com would not actually perform financial, insurance or investment planning. Instead, it would make these processes better.

Security is key

The challenge for Real Global.com lies in both customizing collaborative services for the financial community and securing this collaborative environment more tightly than a drum.

Many Internet and security experts maintain that conducting a financial transaction, divulging confidential information and completing an online profile that asks for personal information on an Internet website are much safer than using an ATM or giving credit card information in person. Yet it is amazing the number of people who would hesitate to complete a financial transaction via the Net, but who would perform the same transaction via a cellular telephone. Internet security technology has evolved to the point at which it is safe to complete financial or confidential transactions on a website-it is much safer than throwing away a bank statement or handing a credit card to a waiter.

It cannot be over-emphasized that confidentiality is the true currency between practitioners and their clients. The goal of RealGlobal.com would be to offer a secured, global collaborative environment that members would use to communicate with each other; transfer files, documents, sales proposals and illustrations; and send email messages including instant messaging. It would also enable members to consult or partner on client cases.

RealGlobal.com must deploy more than passwords. Its security must use several hacker- and virus-resistant strategies, such as dedicated servers, firewalls, encryption and secured socket layers (SSL). (See sidebar.)

Services within a secured site

The collaborative services of RealGlobal.com would go beyond existing Web-based applications like email, text chat, instant messaging and screen-sharing. Services would also include Web conferencing for online client meetings, "colonies" for real-time collaborating with experts and peers and online seminars with coaches.

RealGlobal.com would partner with professional organizations and associations to provide the best possible seminars. It would not conflict with their continuing education, licensing or credentialing business models because RealGlobal.com would offer the Web conferencing medium, not the content or the administration of the continuing education.

Personal online coaches and topic experts would be available in the colonies and Web conferencing areas. RealGlobal.com would offer a smart knowledge base for consulting and collaboration--even using PDAs.

Here's an overview of what could be offered by the Web conferences:

As today's extended enterprise of employees, customers, suppliers and partners becomes larger and more geographically dispersed, the Web is becoming a critical medium for conducting business globally. Forrester Research estimates that 93 percent of firms will do business on the Web by 2002 and that business-to-business e-commerce will grow from $406 billion in 2000 to $2.7 trillion in 2004.
The rapid and broad acceptance of the Web as a medium for business communications is presenting new opportunities to streamline complex business processes and conduct transactions more efficiently. As a result, sophisticated Web-enabled interactive communications have become increasingly necessary as companies seek to become more efficient and effective.

International Data Corporation estimates that the worldwide market for Web-based collaborative service and support will increase from about $14.5 billion in 1999 to approximately $42.8 billion in 2003.

RealGlobal.com would offer 24-hour access to Web conference facilities customized for use by financial service practitioners. Web conferencing could be configured on the following service levels:

Level 1 — Video Voice-Collaboration Tools and Streaming Presentations

Level 2 — Voice-Collaboration Tools and Streaming Presentations (No Video)

Level 3 — Voice Only (No Video Collaboration Tools or Streaming Presentations)

Level 4 — Member-to-Member Video/Voice Collaboration Tools, Streaming Presentations

Level 5 — Member-to-Member, Voice-Collaboration Tools and Streaming Presentations (No Video)

Level 6 — Live Forums, Video Voice-Collaboration Tools and Streaming Presentations

Level 7 — Live Forums, Voice-Collaboration Tools and Streaming Presentations (No Video)

Level 8 — Monthly Online Meeting and Voice Only (No Video Collaboration Tools or Streaming Presentations)

Colonies and their functions

A colony would consist of people with the same interests. The word colony instead of chatroom is used to describe the online communities where professionals collaborate because they are more than chat forums. Colonies are designed to facilitate one-on-one or group discussions in a secured, private environment. They would have the same high level of security as all other sections of the site, including passwords.

RealGlobal.com must protect financial service practitioners and the highly sensitive information they deal in. Again, breaches of confidentiality could result in lawsuits, loss of professional designations and even the practice itself.

The colonies would allow advisors to send and receive instant messages, collaborate with voice and visual integration, consult in private on a case-by-case basis with topic experts or other professionals, enjoy one-on-one sessions with personal online coaches, have intimate client discussions, partner with other professionals and send and receive sales presentations.

RealGlobal.com colonies would recognize that neither all financial practices nor the interests of all financial professionals are the same. As a result, the colonies could be designed with specialty focuses.

Colonies might be structured in the following categories:

CPA Colony. This private colony will focus on the global community of accountants, bookkeepers and comptrollers who serve the small-business community.

Company-Specific Colonies. These colonies would focus on the global community of financial service companies. RealGlobal.com would tailor colonies to meet the specific compliance requirements and concerns of a particular company. RealGlobal.com would build, maintain and monitor customized colonies for sales, idea exchange, workrooms, weekly and monthly meetings, meetings and sessions with topic experts, colony consultants and online personal coaching sessions
Financial Planner Colony. This private colony would focus on the global community of advisors who specialize in financial planning. It would offer two areas of focus: financial planning and fee-based-only financial planning.

Financial Practitioners Resources Colony. This private colony would focus on the daily tools and news that help simplify the day-to-day running of a practice. It would offer three topical areas: business resources, consumer credit and tools.

Insurance Colony. This private colony would focus on the global community of financial advisors whose specialty area is one or more of the following: life insurance, long-term care, mutual funds, annuities, property and casualty and commercial insurance.

Investment Advisor Colony. This private colony would focus on the global community of advisors who specialize in private money management and asset management advisor services.
Idea Colony. This private colony would focus on practitioner ideas, concepts, techniques and skills shared in a highly collaborative environment.

Stockbroker Colony. This private colony would focus on the global community of financial professionals with wire-house and stock-brokerage specialties.

Online seminars

RealGlobal.com would also offer online seminars via streaming media at two service levels: seminars-on-demand and seminars with personal online coaches or topic experts.

Developing customized online seminars will not be cheap. Typically, e-learning service providers charge from $10,000 to $60,000 to develop one hour of online instruction, depending on the complexity of the topic and the media used. HTML pages are easier (and thus usually cheaper to develop), while streaming-video presentations or Flash animations cost more. RealGlobal.com seminars will be about15 to 30 minutes long. Again, RealGlobal.com must not conflict with the continuing education, licensing or credentialing business models of the professional associations and organizations. It would provide the medium and not the content or continuing education process.
Bandwidth is a key factor in delivering high-quality online seminars and the lifeblood of all Internet transmissions. Broadband technology is rapidly evolving and allows for a hyper-fast Internet connection that enables online seminar providers to deliver quality presentations.

Topic experts and personal coaches

RealGlobal.com would provide topic experts, colony consultants and personal online coaches. The goal of these topic experts would be to create an easy and intuitive experience for people who have interest in their specific area of expertise. Topic experts would coordinate and control traffic in and out of the colonies, write articles, create lively newsletters and provide the Web's best links in terms of their topics. Topic experts require a deep knowledge of, and passion for their areas of interest and the skills to build a strong community using chats, newsletters and bulletin boards. They would be required to submit a resume that demonstrates why they are uniquely qualified to speak on a subject.
Financial practitioners will have access to personal online coaches, which will enable them to move to the next level of expertise in a specific product or service area. Personal coaching would also be available for practice management processes such as referral-building, sales skills, technology and training an administrative assistant.

In addition, personal coaches would be available for all other areas of the advisor's practice. These industry experts will benefit from the exposure and activity of the advisor, who, in turn, will gain easy access to credible information and assistance.

Smart knowledge base

RealGlobal.com would enable the financial advisor to arrive at solutions to problems and easily navigate through the consulting and collaboration processes--at their own pace and without distraction. Financial advisors would be able to do this at any time--during business hours or at two in the morning.

RealGlobal.com would enable financial advisors to find instant answers to issues associated with any known planning situation. The dynamic knowledge base of RealGlobal.com "learns " with each consultation. This smart knowledge base would have powerful search capabilities, ensuring that the financial practitioner obtain fast answers to quick questions. This knowledge base would also accommodate PDAs. A financial advisor would be able to use a Palm organizer or a cellular phone to receive information from the knowledge base.

Online financial calculators

All financial websites have financial calculators. RealGlobal.com would have a broad suite of online calculators, as befits its global nature. The calculators must contribute to the daily practice management or practitioners will not use them. RealGlobal.com online calculators would provide user-friendly solutions for practitioners working in all areas of financial services: banking, lending, investments, insurance (including property and casualty, employee benefits and financial planning.

Gaining your clients' trust

If you want to step up to the highest level of success as a financial service practitioner, you must gain the complete trust of your clients when collaborating with them online. That's what a global community such as RealGlobal.com would enable financial service practitioners to do.

In the near future, global customized intranets such as the fictitious RealGlobal.com will free financial advisors from planes, trains, automobiles and sleepless hotel nights when dealing with clients in far-off cities or countries. These global intranets will provide financial cyberspace highways and collaborative tools needed by financial advisors worldwide. They must accept their mission, which is to build and maintain global meeting places that will be as central to the advisor's business as best-practices management, sales software systems, PDAs and the telephone. What they will deliver to financial advisors is value-added services-not merely exciting technology.

Jim Robinson, RHU, CLU, ChFC, CFP, MSFS is CEO of A-PAL Online, LLC. He has been providing support to financial service practitioners for more than 20 years. He can be reached at 678-566-2702 and at jim@apalonline.com.

 

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