Hunting for standardisation

Four years ago, Absa Brokers developed an integrated IT solution to take care of its compliance requirements around the financial planning advice its brokers provide to clients.

In terms of current financial legislation and regulations, records of all advice given around investments, estate planning, retirement funding and so on must be kept for five years after the product has matured.

In order to comply with both the Financial Advisory and Intermediary Services Act and the Financial Intelligence Centre Act, a system was needed, and one was thus developed. In order to enforce compliance, it is mandatory that this customised solution is loaded onto all broker computers.

Initially, brokers were supplying their own hardware, but this became problematic once the new solution started rolling out.

Says Absa Brokers national sales executive Gerbus Vermaak: "Hardware that links to our system must meet certain minimum requirements. So the brokers went out and bought desktops and laptops, and the dealers assured them that they met the requirements. [GijimaAst] was responsible for the software roll-out and was doing call-outs to all the brokers to load the software. They were finding that a lot of the machines did not meet the minimum system requirements. This cost us a lot of money as GijimaAst kept [coming back] and we had to convince the broker that what they had bought was not good enough."

Absa Brokers decided it needed standardisation across all 1 500 brokers.

Says Vermaak: "We went to the market and asked for quotes. Reliability, speed and a national footprint were important to us. We decided that iVolve best met our requirements; since then the relationship has developed and grown."

In terms of its agreement with Absa Brokers, signed in July 2003, iVolve supplies a range of small office/home office (SOHO) equipment to the broker community. Equipment is rented for a 36-month period and iVolve provides onsite maintenance, asset risk cover and loan units in case of failure.

Reliability, speed and a national footprint were important to us. We decided that iVolve best met our requirements.

Gerbus Vermaak, national sales executive, Absa Brokers

iVolve sales director Petro Plotz points out that the company opted to offer Absa Brokers a rental option as the brokers are commission-based employees. "And rentals are fully tax deductible," she says.

The cost to the brokers varies between R600 and R1 000, depending on the type and number of machines rented. After 36 months, the equipment is upgraded; if the brokers make an extra monthly instalment, the machine becomes their property.

Due to the costs involved for the brokers, many of whom had recently acquired new equipment, Absa Brokers negotiated with the broker representative body and decided on a three-year timeline for everyone to be on rented or paid-up equipment that meets the minimum requirements. This timeline came to an end on 1 March.

Absa Brokers has put a policy in place that specifies that all new appointments must rent computers, adds Vermaak. Rented equipment that is returned when brokers leave, for example, goes into a pool and is allocated to new appointees, provided it continues to meet the minimum system requirements.

"We have an agreement that we will pay for equipment that falls out of scope to be upgraded, provided it falls out of scope within six months of the contract lapsing," says Vermaak. Equipment that brokers do not purchase at the end of the contract period is returned to iVolve, which has its own reuse or disposal procedures.

"Absa Brokers has entered into the contract with iVolve, so we take the risk, debit the brokers' accounts monthly and pay iVolve. Included in the cost to brokers is the installation of Microsoft Office, onsite maintenance, loan units and insurance. We took that to ensure we have total control of the maintenance and upkeep, otherwise all the brokers have their own arrangements - and most have no arrangements in place," adds Vermaak.

A further advantage to Absa Brokers is that iVolve is a BEE company, so the deal assists with Absa's procurement targets as well as ensuring broker compliance with Absa's requirements.