Making your sourcing experience magical with Loop
As you know, customer engagement is really important to us here in the Sourcing team, so we couldn’t be more excited about the launch of Loop, the new Iress customer experience programme. 

Our mission is to help brokers, intermediaries, and advisers across the UK secure the best mortgage, protection and retirement products for their clients. How we do that is mostly down to you. 

Some of our most groundbreaking developments resulted from collaboration and direct feedback from our industry partners and customers like The Features service on The Exchange. Brokers told us they wanted a way to compare value alongside price when sourcing Protection. We listened and, following extensive work with product providers, brought the service to market. There’s still nothing else quite like it.

The valuable insights shared with us in surveys, on the Iress Community,  during conversations at events like our Protection Forum and through our dedicated account management and support teams are all part of the magic that makes our sourcing software the best on the market—and we want to keep it that way.

With Loop, we have a way to scale that magic even further.

Your time and feedback help
Loop will give you more opportunities to provide feedback that helps us deliver industry-leading software and service that matches your expectations. We’ll use it to help prioritise our product roadmap and resources, focusing effort where you and your clients stand to benefit most.

What’s more, as the name ‘Loop’ suggests, you can expect greater transparency around what we’re doing—that means more regular updates (like these) about what we’re doing to make your software and your experience more magical.

It starts now
We’ll conduct our next annual customer survey in September, but you can give us feedback anytime using this short survey. 

Thank you to everyone who has taken the time to give us feedback. Don’t forget you can talk to us by emailing the team at sourcing@iress.com or get in touch via The Community if you prefer. We’d love to hear from you.

Jacqui Durbin
Global Head of Product - Sourcing

In 2023, we conducted our annual customer survey, asking our clients their views on what they value most from Iress and where we can improve. We’re pleased to share the key themes we have heard and how we’re using this feedback to shape an improved software and service experience for you. It was great to see a big response this year - so thank you!

Our software is critical to your business.
Across Iress globally, most survey respondents agreed that Iress software is critical to their business. 100% of responding Canadian clients confirmed the business criticality of our solutions. However, there are areas where you would like us to improve. 

In 2023, we saw a considerable increase in satisfaction across all areas compared with 2022, which highlighted that the work we have been doing to improve your experience is on the right track and has had a positive impact. We will continue to focus on areas of improvement you have suggested. 

We also loved hearing about specific Iress team members who provide a great experience and who you enjoy working with. 

You want more engagement and communication with us.
Many of you told us that you'd like to hear more about what we're doing, what’s on our product roadmap, and where you can access further learning opportunities. To deliver on this, we have introduced our new Iress Canada Quarterly Newsletter. 

Our newsletter includes some key updates for you in areas such as:

• Canadian Market Structure
• Market Data updates
• Our software 
• Support
• Operations and networks

You want improved support times 
We are also continuing our customer experience improvement programme established last year, mainly focused on:

• Introducing a new client support portal for easier and quicker triage and resolution
• Relaunching and simplifying key processes
• Growth of team members' knowledge and expertise

We will also introduce new feedback mechanisms across critical services to capture your satisfaction at that moment so we can continue improving your experience. 

Your time and feedback help. 
Thank you to everyone who responded and for your continued trust, business and engagement with us. Your feedback has been incorporated into our vision and strategy to deliver industry-leading software and services that match your expectations. 

We’ll conduct our next annual customer survey in September, but you can give us feedback anytime using the quick pulse survey.

It’s hard to miss the purple cupcakes and frivolity that Friday 8 March brings with International Women’s Day (IWD).

This year’s theme, set by the United Nations, was Invest in Women. Gender equality is one of the greatest human rights challenges, and yet the United Nations estimates it will take 286 years to achieve if nothing changes.

One of the United Nations’ Sustainable Development Goals is to empower all women and girls. This represents improvement with respect to representation, autonomy, financial independence, personal safety, and more. Women continue to face barriers in making decisions about their own health and lives. In every corner of the world, they are at risk, and violence against women remains high. Everyone deserves safety, opportunity and the right to make decisions about their future.

At Iress we’re focused on creating genuine outcomes for long term impact. We decided to make the whole month of March focused on women’s equality, to help build awareness and action for everyone at Iress.

Each week of the month had a different theme, with various interactive sessions to break down barriers. We started by focusing on the core theme Invest in Women, with a webinar from Leaders for Good who provided a fast paced lesson in removing bias for effective decision making. Week two focused on Breaking norms, and we heard from many different inspiring speakers who are doing amazing things to promote better equality for women, such as Tahina Booth (Social Entrepreneur & Tri-International Athlete) Alison Shamir (Imposter Syndrome Expert & International Speaker), Sally Hetherington OAM (International Development Innovator), Giulia dos Prazeres Costa (Human Rights Lawyer, The Organisation for Economic Co-operation & Development), Natalie du Toit (South African swimmer), and Karen Elliott (Professor of FinTech at University of Birmingham).

Week three was our Giving week. We selected four charities that support women and provided opportunities for Iress people to donate and volunteer. Ten Sydney-based team members were delighted to be able to use one of their three Iress volunteering days to help out at Two Good Co during Giving Week. Two Good supports, empowers and employs women who have experienced homelessness, domestic violence and complex trauma. They do this by donating meals to women’s shelters, and offering employment through the Work Work program. The Iress crew rolled up their sleeves to cook some delicious and nutritious meals. Onion tears were shed, pumpkins were sliced, chicken thighs were seasoned, and people worked their muscles stirring vegetables through the biggest bucket of fried rice you can imagine. After a production line that Henry Ford would be impressed with, 330 meals were packed, sealed and packaged up to be sent to women’s shelters across Sydney.

Two Good Co are an inimitable force, because they have come up with so much more than a stop gap solution for homeless or disadvantaged women. They have created programs that are dramatically altering the course of women’s lives and building their self-worth, so they can break free from the cycle of homelessness and disadvantage.

Our fourth and final week of women’s month has been focused on the theme of Reflection. We’re holding a book club session for all Iress people to join and discuss the thought-provoking Lessons in Chemistry by Bonnie Garmus, with the main character the antithesis to a stereotypical housewife in the 1950s who dares women to change the status quo.

Beyond all this, we understand that diverse people, leaders and board members, with different perspectives, experience and gender, will keep Iress relevant, competitive and productive. We’re delighted to have been mentioned in Work180's top 101 workplaces for women, and will continue to turn awareness into action.

The race to improve the communication and exchange of data between applications – or interoperability – is at last beginning to bear fruit.

Given that an average user juggles about 10 fintech applications on their desktop, engaging in more than 1500 interactions a day including more than 200 copy-and-paste actions, there’s a lot of room for error and downtime if data exchange isn’t seamless.

A project, begun nearly seven years by a group of banks, asset managers and vendors in the capital markets to drive interoperability across financial services, has seen a growing commitment from buy-side firms and increasing engagement from the sell-side in the past two years. Described as similar to the FIX (Financial Information Exchange) protocol, FDC3 (Financial Desktop Connectivity and Collaboration Consortium) is an open standard for interoperability between desktop applications.

FDC3 is now part of the Fintech Open Source Foundation’s (FINOS) open-source governance framework, which is attracting the support of the world’s biggest financial and technology institutions. Its goal is to promote innovation and interoperability in financial technology through industry-wide collaboration on open-source software and open standards.

FINOS executive director Gabriele Columbro says the flood of organisations ready to collaborate marks a new chapter for the organisation.

Over the last 20 years, open source has been used over and over again to create new ecosystems, markets and displace obsolete technology monopolies. The financial services industry is truly ripe for this, so I am genuinely excited about what the next months and years will bring. It’s time to think big and our community is ready for it.

Gabriele Columbro - FINOS executive director

Iress has definitively joined the party. Interoperability is the beating heart of an Iress rebuild underway in 2024. In a root and branch approach, we’re building the back end first using technology that is designed for the next generation front end. Moving to a SaaS (software as a service) cloud-hosted model will allow us to pivot and deploy patches and new solutions at a moment’s notice and save clients months in installation time.

It’s a significant investment in an innovative project that delivers best-of-breed connectivity solutions for a seamless user experience and turbo-charged data and analytics capabilities.

Our rebuild includes a frictionless onboarding journey similar to our FIX hub where onboarding, which once took up to eight weeks, is now down to less than one day.

The Iress global FIX Hub is a cloud-native, enterprise hub-and-spoke network that connects buy-side, sell-side and trading venues across global markets. It enables trading firms to expand investment opportunities across all major asset classes and multiple message interfaces. A production configuration can be deployed in under 90 seconds.

Launched late in 2023, Iress Fix Hub has now been deployed into Australia, London and Singapore. The FIX Hub allows Iress clients to quickly connect to any counterparty on the FIX network, improving liquidity, price discovery and transaction times providing a robust global connectivity.

While cloud computing is a mature technology, it’s a relative newcomer to some areas of trading. Forbes calculates that overall spending on cloud computing infrastructure is forecast to top $1 trillion for the first time in 2024, driven by factors such as a growing need to adopt new platforms and as-a-service offerings. Today, it’s about more than the time-and-money-saving opportunities, according to Forbes. Cloud migration is often the key to becoming more innovative, agile and successful.

For Iress, building the cloud application has allowed us to deploy into any region, putting us on the same footing as our global competitors. It gives us the capability to ‘follow the sun’ – a key attribute for any global business.

This article was originally published on stockbrokers.org.au.

In the UK, the New Build sector is a beacon of innovation and adaptation, closely mirroring the dynamic shifts in the housing market. With the demand for housing steadily outstripping the available supply, the creation of new homes is not just a priority but a necessity. This demand is being shaped by evolving customer trends and preferences, prompting developers and lenders to forge new routes to accommodate the needs of potential homebuyers.

Changes are being observed in the preferences of first time buyers of New Build homes. Following the end of Help to Buy, there's been a noticeable increase in interest for smaller, two-bedroom starter homes, including flats. The industry's collective effort to introduce the deposit unlock scheme has been commendable and you now have a small handful of lenders, including Skipton offering 95% LTV on New Build flats and houses, independently without third-party involvement which show’s a willingness to be innovative, adapting to trends and addressing issues faced by society.

This shift is accompanied by a rising interest in various affordable housing initiatives. Several developers are considering the introduction of their versions of Shared Equity programs, and the emergence of Private Shared Ownership models is evident.

The market continues to face challenges including declining home ownership, dwindling supply, falling levels of planning permissions being granted and the frequent changes of housing ministers, but we are seeing gradual improvement in a number of areas.

Despite the above, we could see a more optimistic 2024, UK mortgage approvals have increased month on month since September 2023, with the highest levels of mortgage approvals in January 2024. Pressure on household finances has eased slightly with the positive direction of travel over the last 12 months with inflation and average earnings increasing. There are other reasons to be positive, in November 2023 the House Builders Federation (HBF) released their 10-point plan of practical solutions for government to remove barriers to house building and with the general election looming, the opposition have pledged to re-instate mandatory housing targets should they get into power.

Newly constructed homes are a shining example of energy efficiency, with 85% achieving an A or B Energy Performance Certificate (EPC) rating and using on average 55% less energy. This trend aligns with the increasing preference of homebuyers for energy-efficient properties, as highlighted by Zoopla’s research. This research indicates the significance of an energy rating for purchasers of new homes: 44% consider it very important, and 25% view it as extremely important. Furthermore, these new homes could act as models for upgrading the existing housing stock throughout the nation, utilising contemporary design, cutting edge technology, and eco-friendly practices to lead the way towards a more sustainable future.

These developments signal a significant transformation in the housing market, influencing the preferences and strategies of today’s buyers. Additionally, there are clear opportunities for the industry to learn from the New Build sector, with brokers poised to not only meet this demand, but also establish themselves as indispensable advisers within the sector.

Skipton Building Society for Intermediaries (skipton-intermediaries.co.uk)

FOR INTERMEDIARY USE ONLY

A staggering 2.6 million people in the UK are currently unable to work due to long-term illness alone. Having a life-altering health problem is bad enough but when you consider many of these individuals can’t earn a living due to their situation, it’s a sobering thought that begs the question: Why is Income Protection the ‘forgotten child’ of the insurance market?

Whilst the future is unpredictable, it is possible to lessen the knock-on effects of potential health problems. One way for your clients to shield themselves from the financial fallout of illness or injury preventing them from working is with Income Protection Insurance.

Why is Income Protection Insurance important?

Comprehensive coverage

Income Protection plans allow customers to cover any condition that leaves them unable to work, compared with critical illness cover which is a predefined list of conditions only paying out on diagnosis of a specific condition, potentially leaving many customers without protection. When 104.9m working days were lost to sickness absence for those with long term health conditions in 2022, there is certainly a need for people to protect their income.

Flexibility

There are shorter and long-term retirement plan options to suit different budgets. These can also be updated when the client’s circumstances change, such as if they get married, have a baby/adopt a child or change jobs, to ensure their cover remains relevant.

Enhanced benefits included

Income Protection plans quite often include a range of additional benefits. For example, at Shepherds Friendly, a virtual GP service, an emotional well-being platform and Nuffield Health gym discount are all part of the plan and can be used by the customer regardless of whether they make a claim.

Can be vital for younger clients

Statistically, younger demographics are more likely to be off work ill than die or get a critical illness, so while life and critical illness are vital parts of the protection proposition, having this Income Protection insurance in place could make all the difference if they were left unable to work. Plus, Income Protection plans can be claimed on more than once, so if people are off multiple times throughout their careers, they can continually make the most of their plan.

Advisers and customers also now have the option of a simplified application without the need for underwriting decisions, meaning you can get cover quicker than ever before. A survey of advisers* in 2023 revealed that ‘underwriting decisions and processes’ were the main pain points of selling Income Protection, but with a modernised process, the experience is smoother, offering an instant eligibility decision.

All in all, Income Protection is an essential, yet frequently underestimated, part of financial planning, as it can offer your client invaluable support in times of need. The fact that millions are already suffering from long-term illness that prevents them from working only highlights the need for this kind of protection, yet not enough people are taking notice. Income Protection Insurance can not only safeguard someone’s salary but it can also provide added peace of mind.

^{*Source: COVER Survey: Advisers damning of protection insurer service levels (covermagazine.co.uk)}

We recently analysed our Q3 loan usage data for initial advances, looking at the top five reasons or lifetime mortgage borrowing among our customers by application proportion. The results painted a mixed picture, with necessity-based reasoning such as debt repayment sitting alongside more aspirational reasons such as holiday and car purchases.

Having similarly looked at the reasons for cash release access and additional borrowing via further advances, a similar (and, if anything, heightened) picture emerges. Perhaps unsurprisingly given the current landscape, day-to-day living expenses, emergency funds and debt repayment are prevalent in these returning customer patterns, while those wants-based reasons remained strong among the top loan usage reasons.

Let’s look at our findings in more detail, and see what returning customers have been releasing funds for in Q3.

Cash Releases

As with all forms of borrowing – whether initial advances, cash releases, or further advances – home improvements account for the most popular reason for reducing funds. Among cash releases, they account for 40% of drawdown activity, representing a 1% drop from both Q3 last year and Q2 2023.

Holidays, meanwhile, have remained in the second spot but have seen a continued reduction in activity as a proportion of cases – the 13% seen this quarter is 3% down on last year, and 2% down from Q2 this year. Car purchases have maintained the 9% proportion seen in Q2 (down from 10% last year), but have actually risen by one position in terms of popularity from the fourth place seen in Q2.

Nearly one in ten people accessing drawdown facilities are doing so to pay for their day-to-day living expenses. This didn’t register in the top five at all this time last year, and having sat at 11% (and in third place by popularity) in Q2, it’s now dropped to fourth with a 9% share.

Gifting has remained stable as a lesser consideration among those who access drawdowns, sitting at 5th place and 6%, neither statistic representing any major change over the past twelve months.

Further advances

Home improvements’ 27% proportion of additional borrowing represents a 3% year-on-year drop, but a 1% increase from Q2. There’s been a 2% quarter-on-quarter rise in the proportion of people using additional equity to create an emergency fund, with the 13% seen in Q3 also a one-position rise to second place in popularity, suggesting an uptick in releasing additional funds out of necessity – however it should also be noted that this also represents a 2% reduction compared to last year.

Holidays have continued to sit mid-table (at around 12%) as a reason for additional borrowing, though it’s dropped a position from the second most popular usage it held in Q2. Gifting, meanwhile, has seen a 1% drop quarter-on-quarter and a 2% drop year-on-year, suggesting a prolonged period of it becoming less popular as a reason for further borrowing.

In Q3 last year debt repayment held the fifth place position by proportional popularity, but has since been overtaken by car purchases. Having emerged in Q2, it’s remained the 5th most popular reason in Q3, mainly holding stable with only a 1% reduction in that period.

The mixed picture being presented alongside more aspirational means points to the diverse customer profile that underlines the market’s development in recent years. It also points to the need for a holistic approach when it comes to product development to ensure lifetime mortgages continue to a potential retirement avenue for as many people as possible (even when it comes to returning customers, rather than solely new applicants), and we’re looking forward to continuing our own commitment to that into 2024 and beyond.

Find out more about Pure Retirement here

Welcome to our Autumn edition of Industry Voice

We hope you enjoy it.

If you’d like to read previous editions, visit the Industry Voice homepage.

Become a contributor

Industry Voice provides high quality thought leadership, analysis and commentary on the key trends and themes impacting the UK’s mortgage, protection and financial advice industry.

Each edition is produced and distributed by Iress and promoted across our digital and social media channels to a UK-wide audience of mortgage and insurance brokers, financial advisers and wealth managers.

For advertising, sponsorship and editorial enquiries, please contact:

Neal Ray
Advertising & sponsorship manager
Call: +44 (0)7816 536 166
Email: neal.ray@iress.com

While inflation has shown signs of slowing of late, the year so far has continued to provide a challenging backdrop for those wanting to make major financial decisions or plan for the future. This has certainly been true of Q3, as evidenced by our figures and the picture they present of very mixed usage patterns between aspirational uses for released equity, and those more rooted in necessity.

Let’s look at our analysis and see what new customers have been releasing funds for in Q3, and how it compares to this time last year, and Q2 of this year.

Among new customers, the most popular uses of lifetime mortgages remain a balance between the aspirational and the necessary. Both general (i.e. non-structural) home improvements and the repaying of debts and mortgages accounted for around 22% apiece of reasons for borrowing during Q3 – this represents no change in position among the top five most popular reasons for either, with home improvements just edging the top spot. Percentages as a proportion of loan applications have also largely remained stable both year-on-year and quarter-on-quarter, though home improvements saw a 2% drop compared to Q2.

Gifting has grown in popularity, having risen to the third most popular loan usage reason among applicants, compared to being fourth during Q3 2022 and Q2 2023. That said, as a percentage it’s remained remarkably stable, gaining 1% year-on-year to sit at 9% of new business volume, and remaining unchanged from Q2. While mortgage rates in the residential market have started to drop, they continue to remain relatively high, and as such will likely have contributed heavily to the continued popularity of gifting among families, especially among those who are seeking to help children or grandchildren enter the property market.

Additional aspirational reasons bring up the lower end of the top five most popular reasons for initial advances, with cars and holidays steadfastly remaining a constant despite the more changeable wider landscape. While holidays have dropped to fourth (from the third place it held in Q3 2022 and Q2 of this year), its percentage has continued to hold steady at 9% throughout the past twelve months. The 8% of people using new initial advances during Q3 for car purchases, meanwhile, represent a 1% increase year-on-year but a 1% reduction from the 9% seen in Q2 of this year.

The diverse range of needs and priorities among customers highlights the need for continued product innovation, and the need for those in the later life lending space to fully understand their customers and their circumstances. From updating their homes, repaying debts and helping family members, through to buying cars or arranging holidays, lifetime mortgages undoubtedly remain an adaptable product well-suited to various needs. With an appetite remaining present among consumers even amid an uncertain year for many, it points to a resilient financial services sector ready to support customers when they decide to explore later life lending.

Find out more about Pure Retirement here

The FCA’s mortgage lending statistics for Q2 2023 show that the share of gross mortgage advances to first time buyers was 24.6%, 1.9 percentage points higher than Q1 2023 and 2.2 percentage points higher than in Q2 2022. Whilst this is a slightly higher percentage of a lower total amount of lending it shows that there are still first time buyers out there, keen to get on the property ladder.

First time buyers face myriad challenges in the current climate. Research recently undertaken by Skipton Building Society shows that on average it takes 7.9 years to save the deposit for a first home, 12.8 years in London. Combined with the recent increases of mortgage rates and knock-on challenges with affordability, the cost-of-living crisis and the end of Help to Buy, there’s a lot for someone buying for the first time to tackle. Some first time buyers have family members or friends who are able to contribute towards their deposit but, for many there is no such support. Lender innovation in this area will be key.

Another area in which we can all help first time buyers is with their understanding of the mortgage market and terminology. Consumer understanding is one of the four outcomes of the recently introduced Consumer Duty requirements and firms have been spending much time this year ensuring that their communications meet those requirements. We work in an industry that uses a lot of technical terms and it can be difficult to be aware that what is an everyday word to you, may not be fully understood by a customer. A recent Skipton survey of 1,000 first time buyers found that 40% were confused by mortgage terms such as stamp duty, negative equity and conveyancing, 60% of them are worried that their lack of understanding is slowing down the process and 52% are worried about missing out on a better deal because they don’t understand what is available to them. Nearly eight in 10 (79 per cent) of all first time buyers surveyed agree the homebuying process would run a lot smoother if everyone just spoke in layman's terms.

We all have a part to play in demystifying the home buying journey and the language used. Brokers can play a vital role holding their first time buyers’ hands through the process, ensuring customers fully understand the meaning of the terminology used, that they are not missing out on the right product and that they have a mortgage product that meets their needs and circumstances. I for one am keen to work together, to share our knowledge and to help first time buyers take that first all important step.

To find out more, visit us our page or speak to your local Skipton BDM.

Knowing how to take your money in retirement used to be easy even if the system was broken and needed fixing. There weren’t many options available and so the majority took their tax-free entitlement and purchased an annuity with the remainder, but at least people’s choices were tram lined by what the tax rules allowed.

However, this only really worked if people shopped around and understood their options. And a ‘once and done’ annuity purchase was unlikely to fit most people’s circumstances.

The ripping up of the retirement rulebook in 2014 might have given people total freedom and choice but it hugely increased the complexity of retirement decision-making. At the same time, it opened up an opportunity to develop solutions that better fitted with people’s needs.

A combination of moves

So what does the future look like? With annuities back in fashion thanks to recent rate increases, we think that people will increasingly use combined approaches to help secure their income. Meaning guaranteed portions of an income will be used to cover essential expenditure, with non-essential expenditure covered by drawdown. This allows people to balance out certainty and flexibility.

Furthermore, securing the guaranteed portion of the income could be undertaken in stages, to take advantage of improving annuity rates as people get older. As well as giving people flexibility, this could also act as a good inflation hedge.

An evolving market

This model could lead to better outcomes for people, both in terms of financial outcomes, but also giving people flexibility to adapt their approach as their plans change.

We believe that blended approaches will be the way forward as trustees and providers look to innovate in the ‘at retirement’ space. Solutions and approaches are evolving and developing, but where we really need to focus energy is on the choice architecture to help people with the decisions that they have to make. Access to advice is crucial here, but equally important is how we help and guide those that don’t access formal advice and what the potential role of default strategies could be to help anchor people’s decision-making in retirement.

No more cliff-edge decisions

We also need to think of retirement decisions as ongoing and move away from a ‘set and forget’ mentality. People don’t want to be making decisions on a yearly basis, but they do need flexibility to be able to adapt in a change of circumstances.

This will be a key challenge, especially as people get older and potentially become more vulnerable. But if we don’t crack this, then we’ll struggle to help people make the most of their pension savings.

To deliver great outcomes we need to innovate. ‘Freedom and choice’ is all very well but it doesn’t on its own deliver what people want more than anything – an income. We have to accept that as an industry we bear a responsibility to come up with solutions to help deliver a decent retirement.

Visit our website to find out how a Standard Life Pension Annuity could help your clients enjoy a guaranteed income for life.

In the 1960s General Motors was the biggest car manufacturer in the world and its home, Detroit, was the epicentre of the global automotive industry. In 1976, at its peak, nearly half a million people were employed by the city’s car industry - that’s almost 30% of Detroit’s highest population figure.

These well-paid jobs meant that the city expanded, wealth increased, and the city even gave its nickname to the Motown record label. And yet a decade later, the city was in decay. Unionisation, racial segregation and monopolisation from larger manufacturers played a part, but what really accelerated the decline was competition from the Far East. Nissan, Honda and Toyota all did what Ford, GM and Chrysler could do but they did it faster, cheaper and more reliably through automation.

In our race to automate, we sometimes forget that small businesses are not just businesses.

We’re at a similar point in the mortgage industry. Advisors are under pressure to do more - write more mortgage business, sell more protection, be faster with documentation. And they’re being given the tools to do it. Choosing the right mortgage for your customer has never been easier, and protection products are just a click away too. And that means that fewer people can do more work, meaning that 10 advisers can do the job of 20. It means you don’t need someone to set appointments, or to input documents, or to do a multitude of other administrative tasks. And that’s a good thing, isn’t it?

Well, no, not always. In our race to automate, we sometimes forget that small businesses are not just businesses. They’re a livelihood for their employees, some of whom have been there decades, and businesses feel a responsibility to them. I’ve heard stories of companies refusing to get a coffee machine because it will do the tea lady out of a job, and of brokers refusing to upgrade software, asking “what will my administrator do?” Small businesses have a far greater impact on local communities than their multinational counterparts based in major metropolises. They and their employees directly contribute to the microeconomy, providing wealth and jobs for others and helping their community prosper.

But the refusal to automate, however well-intentioned, can only result in the decay of that business; today, there is no tolerance for slow and archaic. I think that the fear of automation comes from a deep misunderstanding about what it’s for. Let’s go back to the car industry of the 60s and 70s as an example.

Japan - architect of the acceleration of the decline of the US car industry - wasn’t actually making cars with robots. It was just automating the low value, high touch processes that had been done by hand up to that point. People were still needed on the production line, they were just more efficient. The drive for Japan to produce more cars and to go after the global market came in response to macroeconomic conditions - the oil crisis, exchange rate pressures and domestic competition - and so instead of automation reducing the number of jobs, it actually helped increase it.

Likewise, with mortgage advice businesses there is pressure from larger competitors and a turbulent economy. It’s essential that businesses become more efficient, not to reduce operating overheads, but to increase the potential for revenue. Instead of reducing the number of advisors, being more efficient means that individual advisers can do more and so the business can afford to employ advisors, and people to make the tea or to set up diaries or to chase up applications.

If it’s done right, the human cost of efficiency isn’t a cost at all.

Welcome to our Summer edition of Industry Voice

We hope you enjoy it.

If you’d like to read previous editions, visit the Industry Voice homepage.

Become a contributor

Industry Voice provides high quality thought leadership, analysis and commentary on the key trends and themes impacting the UK’s mortgage, protection and financial advice industry.

Each edition is produced and distributed by Iress and promoted across our digital and social media channels to a UK-wide audience of mortgage and insurance brokers, financial advisers and wealth managers.

For advertising, sponsorship and editorial enquiries, please contact:

Neal Ray
Advertising & sponsorship manager
Call: +44 (0)7816 536 166
Email: neal.ray@iress.com

A new security vulnerability (CVE-2023-4863) has been identified impacting major web browsers. Iress Pro is vulnerable to CVE-2023-4863 but we have not identified any exploitation of our software. We have included a security patch in the latest version of Iress Pro which has just been released. Download here.

About the vulnerability

Citizen Lab has recently disclosed CVE-2023-4863, the most recent zero-day vulnerability. The vulnerability was discovered in WebP, an image file format developed by Google and supported by other web browser makers. The security vulnerability impacts Google Chrome versions prior to 116.0.5845.187 and allows a remote attacker to perform an out-of-bounds memory write through a malicious WebP image. Researchers uncovered the vulnerability was utilized to deploy the Pegasus spyware developed by NSO Group.

Although Iress have not identified any exploitation of our software at this stage, we have taken immediate preventative measures to ensure our software has been patched to remove our exposure to CVE-2023-4863. We now also strongly recommend that clients take the latest release as a priority.

Is Iress Pro vulnerable to CVE-2023-4863?

Yes, Iress Pro is vulnerable to CVE-2023-4863, Iress Pro contains an embedded browser that utilizes a Chrome library which is affected by the CVE-2023-4863 vulnerability.To mitigate the CVE-2023-4863 risk, we have taken immediate preventative measures to ensure our software has been patched to remove our exposure to CVE-2023-4863. We now also strongly recommend that clients take the latest release (21.1.60) as a priority.

Has Iress Pro been patched and secured?

Yes, we have patched embedded browsers using the affected Chrome library in Iress Pro release 21.1.60, and strongly recommend all clients upgrade to this release as of 15 Sep 2023.

What is the ask from the clients?

Clients are strongly recommended to upgrade their Iress Pro with the latest version which was released today.

What is the risk if we do not update to this new version?

Iress Pro currently uses Chromium and MS Edge as part of loading web capabilities within the product.

• Chromium

The components that use Chromium have been patched in the latest Pro version. Unpatched versions are at low risk of being able to execute the exploit as they are controlled in a way that users cannot execute code within these components.

• MS Edge / Internet Explorer

Iress Pro has an internal browser which uses MS Edge from versions 21.1.20 onwards and the version of MS Edge is based on the MS Edge version on the client system. Patches to MS Edge are deployed through the standard MS Automatic Updates.

For versions prior to 21.1.20, Iress Pro used a version of MS Internet Explorer which was embedded in the Pro version and this has the ability to execute malicious code on behalf of the user, however Internet Explorer is less likely to be affected by this vulnerability as it is not a Chromium based-browser.

• External Website access

Users who are able to access websites without restriction are those that would be at the highest risk of executing malicious code through Pro. This would apply to those users running older versions of Pro without any restrictions to the websites they can access.

We recommend having your information security assess the risk for your organisation.

We need to talk about annuities

There's been a lot of discussion and debate about annuities recently.

With significant improvements to the rates on offer, they’ve become a much more attractive proposition for those who are approaching retirement. At the same time, the ongoing cost of living crisis and market volatility has increased demand for solutions that can offer greater financial certainty.

These two forces have ultimately combined and triggered a new era for retirement income planning. Despite this, our latest research shows that, even within the advised population, there’s still a lot of work to be done to help educate those who are approaching retirement about annuities, while also dispelling some of their long-standing myths.

What advised consumers are thinking

We spoke to 2,000 adults who are over 50-years old about their views on annuities and retirement. This included more than 200 consumers who currently pay for professional financial advice.¹

What’s immediately striking is that, while almost all advised consumers (99%) say that income security in retirement is at least somewhat important to them, less than half (41%) believe that annuities are the best option for guaranteeing an income for life.

It also appears that the recent media coverage around improved annuity rates hasn’t fully filtered through. Indeed, almost half the advised population (48%) still associate annuities with being expensive and offering poor value for money. This is in spite of the fact that annuity rates have improved by 20% since June last year (and have jumped a massive 48% since the beginning of 2022).²

In monetary terms, the improvements over the last 12 months mean that a healthy
65-year-old male with a pension pot of £100,000 could now expect to pocket over £25,000 more over the course of their lifetime.

A new age. A new advice conversation?

While advised consumers are notably more knowledgeable about pension matters when compared to those who go without professional financial help, there are still sizeable numbers who are unsure about how annuities work and the benefits they can offer.

For instance, more than 3 in 10 (34%) advised consumers believe that annuities must be purchased at the point of retirement, while around the same number (30%) aren’t sure whether they’d need to use all of their pension savings to buy one. Interestingly, 4 in 10 (40%) don’t know they can buy an annuity to work in combination with income drawdown.

By raising awareness and understanding around annuities, it could lead to a deeper advice conversation. A good start would be amplifying the fact that managing your retirement income doesn’t have to be a ‘one and done’ decision.

In fact, many consumers may actually enjoy a better outcome if they were to combine the flexibility of drawdown with the security of an annuity, and then regularly review the balance between the two. This could see them gradually turn more of their unsecured pension savings into a guaranteed lifetime income as they grow older or their needs change.

If you’d like to show your clients the value of having an annuity as part of their retirement income mix, our annuity tracker actively monitors the average rates on offer across the market. It can also show you what the latest developments mean for expected lifetime incomes. You can find out more on our website.

Sources

^{1.Research was commissioned by Standard Life and conducted by Opinium, with a nationally representative sample of 2,000 adults aged 50+ between 6 – 14 March 2023}

^{2.Annuity rates data provided by AMS Retirement. Accurate as of June 2023.}

The number of customers with adverse credit is growing. It shouldn’t come as a surprise, given the ongoing cost-of-living crisis and rising rates have put a squeeze on household finances.

Rising monthly costs are driving more people to credit to make ends meet. The Money Charity says that at the end of May, outstanding consumer credit lending was £213.9bn, increasing by £809m for the previous month. Within this, outstanding credit card debt increased by nearly 8% to £66bn, and the average credit card debt averaged £2,350 per household.

At the same time, the cost of borrowing on credit has increased. Bank of England data shows that credit card interest rates hit their highest level in 27 years in June, rising to 23.1% from 21.43% compared to the same month in 2022.

When you then layer on other forms of credit, such as car finance, personal loans, and overdrafts; it’s clear that we’re living in an environment where missed credit payments are only going to become more commonplace.

This is reflected by sourcing data from IRESS, which shows that 28% of all enquiries in June had at least one element of adverse credit, a significant increase from July last year when it was just 21%.

In our own Specialist Lending Study, published in the winter, Pepper Money said the number of people considered to have adverse credit had grown to 7.91 million, up from 6.29 million the previous year.

So, what’s the best approach when working with a customer with adverse credit?

On occasion, high street lenders may accept a missed payment or two if a case fits within their overall credit score requirements. However, this isn’t always the case and submitting an application with adverse credit can often result in considerable delays whilst it is reviewed, which can then be followed by a decline. In a situation where a customer is trying to buy a property or complete a remortgage before they need to pay their lender’s SVR, this delay could prove very costly.

Research conducted by Pepper Money amongst more than 500 brokers earlier this year found that just over 41% value clear and concise criteria as an essential characteristic in identifying a preferred lender – and this is particularly true when working with customers who have adverse credit.

When you are sourcing the right mortgage for your customers with adverse credit, it can often be best to look beyond rate and speak to a specialist who can provide clear criteria and certainty from the outset, particularly when time is a critical consideration. Lenders who are not specialists in working with customers who have adverse credit will be more likely to decline an application, and often only once they have taken valuable time to review the case.

The number of customers with adverse credit is increasing, and by choosing to work with the right lender from the outset, you can meet the needs of this growing group, providing them with the certainty they need.

Paul Adams, Sales Director at Pepper Money

Over the past year Iress has been working with the River Nile School, an independent school for refugees and asylum seeker women. From meeting the students at their careers day to work experience and the mentorship programs at Iress’ Melbourne office, we always knew that this would be a rewarding collaboration. We know there are significant challenges refugees and asylum seekers face when it comes to accessing education and employment opportunities. Part of the rewarding nature of these events is hearing the students’ stories of the trials and triumphs of integrating into a new country and finding their sense of belonging.

My first ideas of design was that it was about physical things, about something you can touch. But it wasn’t IT. Now I know designers can design anything and that can be me. We can design the future for people like me” - Maram Irdis

The Iress Design Scholarship

Hearing these stories inspired our team to act - we wanted to create a valuable experience in collaboration with the students. We started by creating a design mentorship program working with students to teach them design while also addressing their needs by incorporating digital literacy and professional skills along the way. We had to ask, how can we go even further and move to the next phase to help increase opportunities for the students?

The Iress Design Scholarship represents the next stage of this collaboration and is a reflection of all the hard work and effort the students have already demonstrated. In partnership with our friends at Academy Xi, Iress is providing an opportunity for women from the River Nile School to access a fully paid accredited design course.

Iress believes that this scholarship will provide an opportunity for these amazing students to gain new skills, increase employability, and contribute to their local communities. Our partner Academy Xi is a specialist education provider focusing on digital skills and their courses allow graduates to apply learnt skills with real world clients, giving graduates the best opportunity for landing their dream role upon graduation from their course. We think this is a fantastic next stage for the students.

“I want to try to explore and learn and this is something I missed out on back in Sudan. What I like about UX design is that every step is so different. I love that there are always different things to learn and do. Now I want to try everything! I’m a mix of scared and excited about the course.” - Marwa Irdis

Our scholarship winners:

Iress would like to congratulate the recipients of the Iress Design Scholarship: Marwa Irdis and Maram Irdis, who have excelled in their mentoring sessions run by the User Experience Design team. Marwa and Maram are sisters who migrated from Sudan three years ago, and have since made Melbourne their home.

After being introduced to the profession of UX design nine months ago, they have shown an amazing dedication to learning the craft of design. In their weekly mentoring sessions they tackled the challenges of balancing schoolwork, learning design concepts, as well as learning a new language. It’s these qualities of dedication, optimism and curiosity that makes both these amazing young women fitting recipients for this design scholarship.

When asked about what this opportunity means to her, Marwa replied, “It means everything, it’s a super good feeling. Before this I couldn’t imagine being a designer, but now it’s something I know I can be if I want it.

We at Iress and our friends at Academy Xi are thrilled to be a part of Maram & Marwa’s journey into design and look forward to seeing the great things that they create.

Welcome to our Spring edition of Industry Voice.

We hope you enjoy it.

If you’d like to read previous editions, visit the Industry Voice homepage.

Become a contributor

Industry Voice provides high quality thought leadership, analysis and commentary on the key trends and themes impacting the UK’s mortgage, protection and financial advice industry.

Each edition is produced and distributed by Iress and promoted across our digital and social media channels to a UK-wide audience of mortgage and insurance brokers, financial advisers and wealth managers.

For advertising, sponsorship and editorial enquiries, please contact:

Neal Ray
Advertising & sponsorship manager
Call: +44 (0)7816 536 166
Email: neal.ray@iress.com

Let's start with some troubling figures: according to recent projections, there are around 12 million Australians who say they have unfulfilled advice needs. The average adviser can work with up to 120 clients, and there are approximately 15,000 active advisers on ASIC's register.

You don't need to spend too much time running the numbers to determine that this works out to a pretty significant shortfall. In fact, Australia's "advice gap" was one of the primary issues that the recent Quality of Advice review was designed to address. We don't yet have all the details on how and when its recommendations will be implemented, but we do know that there's an appetite in Government to reduce the barriers between advice and the millions of Australians who need it.

Of course, regulatory reform can't be the entire solution to this problem. It's estimated that around $5 trillion in assets will be changing hands over the next decade in Australia, and the younger generations looking for advice on that wealth will have markedly different preferences for how advice is communicated, implemented and reviewed on an ongoing basis.

Put simply: the average adviser can expect a major shift in the demographic make-up of their clientele over the next decade, and their processes will need to adjust accordingly.

Generally speaking, younger investors have a greater preference for immediacy, on-demand services and "platform agnosticism" – that is, the ability to access those services on their phone, laptop, tablet or wherever else is required. They're also more comfortable with longer stretches of the advice relationship being conducted virtually, perhaps even mediated through chatbots and other automated tools.

Behind the scenes, it's generally expected that advice can offer global connectivity. Younger clients appear to have a less prominent preference for domestic assets, and may seek global diversification through digital assets and exchange-traded products.

For many advice businesses, the ability to provide this level of connectivity and immediacy will depend on how successfully they can leverage their technology partnerships. Which is why it's crucial that advisers start talking to their technology partners now: determine what your future business model looks like and ask them how they can work with you towards that goal.

It's important to note that the tech strategy for your business needn't solely focus on keeping up with changing consumer expectations. Effective use of data can also help advice businesses refine their offering and even service a wider variety (and greater number) of clients – going some ways to addressing the advice gap discussed at the outset of this piece.

Consider, for example, using a data-driven approach to client segmentation. How can advisers use the volumes of client data they already have to more effectively segment their client-base? Can this segmentation be automated?

On the investment side, could advice businesses generate machine learning insights through transaction modelling, historical trade analysis and prediction? And is there scope for using a ChatGPT-esque tool to field simple client (or prospective client) queries, informed by the information, education content and processes used in your business?

Many of these possibilities are already being explored in advice businesses right now – here and overseas. This is why it's so important to work with a technology partner to determine how you can integrate this kind of approach into your business. Assuming they have a reasonably-sized client base, they likely have a much broader view of how the industry is shifting, emerging operating models and new technologies on the horizon.

Preparing for the next era of financial advice may seem daunting – but it's not something you need to do alone.

Emily Chen, Iress’ Global Head of Product (Technology Platform), discussed this topic recently at SIAA 2023. You can watch the recording here.

Back in 2006, Wired magazine founding editor Kevin Kelly estimated that the total volume of data produced by humanity - from "the days of Sumerian clay tablets" to the second term of the Bush presidency - amounted to about 50 petabytes, or 50 million gigabytes.

By the end of this year, it's projected to reach around 120 zettabytes – that's 120 million petabytes. In other words, over 99.9% of the information in recorded history was created in the past 17 years. It's very easy to understate the relative informational complexity of the current moment when everything from the Magna Carta to the Moon landing – basically, anything created up until just before the launch of the first iPhone – amounts to a rounding error.

In the investment space, this means the data sets brokers and advisers have to contend with are increasingly, staggeringly complex relative to just a few years ago. And actually gleaning useful insights from all that data – separating the works of Shakespeare from the TikTok reel, if you will – can be a very daunting task.

At Iress, we're acutely aware of this problem. We believe data is useless unless you can actually extract value from it, which is why we're committed to delivering quality data and actionable insights for our clients.

Our aim is to build the world's most reliable, robust and innovative order management and trading platform – one that enables you to capture opportunities and realise flows in real time while also being scalable enough to handle the increasingly complex data sets of the future.

This is a multi-stage project which has involved a substantial uplift in our core operating systems and decommissioning of legacy products. We've developed multiple market data APIs to support data ingestion and can now provide connectivity between all major public cloud providers globally.

Later this year, we're launching the Iress Trading App, which provides users on-the-go access to the information and tools they need to execute on a wide range of trading strategies. We are also targeting the roll out of a cloud native Global FIX Hub, which enables frictionless client onboarding, low-touch workflow that dramatically reduces testing, reconciliation and deployment overheads and multi-region cloud-native infrastructure.

All of this is aimed at helping brokers and advisers navigate a data ecosystem that’s getting bigger and denser every year. Over time, we'll also be incorporating machine learning-based insights for smarter trading and investing decisions, such as historical trade analysis, analysis and prediction by combining trade data and market data and transaction monitoring through anomaly detection and identity verification.

We don’t consider this program of work just a value-add for clients – we believe these are the necessary tools and capabilities for tomorrow’s trading businesses. Being nimble and scalable enough to turn all those zettabytes into actual insights – and execute on those insights in real time, wherever you are – will be the yardstick for determining the quality of investment advice in the years to come.

This article first appeared on SIAA Newsroom.