Research context

Rogers (1995) defines a social system as a set of interrelated units that are engaged in joint problem-solving to accomplish a common goal. This research focuses on UK independent financial advisors (IFAs) as forming such a social system. IFA status was created by the Financial Services Act 1986, and indicates an intermediary who deals with savings and investment products from a range of financial services providers rather than a tied agent who deals with only one supplier (Harrison, 2000). The IFA is viewed as a critical channel to market for financial services institutions in the UK, as consumers demand impartial advice on savings and investment products whilst product providers have refocused on them as a pivotal channel in their overall distribution strategy (Datamonitor, 2002).

Vasudavan and Standing (1999) have identified three common key tasks performed by intermediaries these are: information broker: passing information between customers and providers; transaction processor: completing application forms and forwarding payment to providers; and customer advisor. In addition, according to Vasudavan and Standing (1999), intermediaries have specialised knowledge and access to specialised sources of information. Specialised knowledge is to found amongst IFAs since professional qualifications have to be gained in order to become licensed as an IFA in the UK, and specialised information, that is not generally available to the consumer, is accessed through subscription and membership of online portals, dedicated publications, professional organisations and trading networks. These qualifications, tools and knowledge networks support the IFAs as experts in integrating the financial needs of consumers with the services provided by financial services suppliers and also create the links that constitute a social system.

An overview of the factors driving web site development within the financial services sector is timely. A recent government report on the medium and long term savings industry identified that co-ordination and co-operation difficulties are manifest through a lack of customer facing sites, low levels of capital investment, poor integration of legacy systems and a lack of common standards (Sandler, 2002). Due to successive and proposed legislation to remove entry barriers and cap administrative charges, providers are looking to reduce their processing costs. Investment in technology is one option which in turn increases the necessity for IFAs to have enhanced technological capability that facilitates end-to-end processing in order to realise cost savings. Furthermore, within the banking sector there are indications that consumers value the relative advantage of online banking in terms of the increased convenience and enhanced service of online access (Kolodinsky et al. , 2003). However the technological capability of IFAs is relatively poor hence the market presents a significant "technology catch-up" opportunity (Datamonitor, 2002). Therefore this paper reports on the factors driving web site development amongst IFAs who are involved in the distribution of medium and long-term investment products.

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