Finance firms agree online standard

Financial firms and independent financial advisers have agreed a standard legal contract for electronic valuations of pensions,...

Financial firms and independent financial advisers have agreed a standard legal contract for electronic valuations of pensions, bonds and units trusts.

The legal framework limits the liability of parties involved in electronic transactions and addresses concerns raised by insurers that they could face hefty compensation claims from disgruntled customers.

The XML-based standard, from standards body Origo, will also save product providers from negotiating individual contracts with different IFAs.

The standard was launched last year and allows an IFA to get an online evaluation for new and existing products within seconds.

The insurance companies that fund Origo signed up to the new XML-version of the existing contract enquiry standard last autumn, but raised concerns that they would be vulnerable to large compensation claims from customers as a result of poor financial advice from IFAs.

Now the IFA can either send a request through an industry portal, or exchange information with the back-office systems of a financial product provider.

Despite some teething problems, Origo's standards have become one of the success stories for e-business in financial services. Its digital certificate standard, Unipass, has more than 5,000 users.

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