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AIM-listed Inter-Alliance hopes to be the UK's leading group of Independent Financial Advisers - and it is using the internet to get there, as chief executive Stuart McGreevy explained to William Davidson.

The traditional IFA network is inefficient and fragmented, according to McGreevy. It is driven by the individual members, whose average age is 54, and is dominated by small practices, with the average company employing less than two IFAs. There are high and costly barriers to entry, and it is resistant to change.

Inter-Alliance is hoping to change all that using the efficiencies and new techniques made available by the internet. The roll-out of the new web site, which is part of an eighteen month project, is the first step in building a one-stop shop for financial services commodity products. And it is the fact ISAs and mortgages are becoming increasingly commoditised that makes them ideal products to be sold over the web. Products sold to new customers using the internet enjoy much healthier margins than those sold using traditional methods, McGreevy added, and existing clients can be serviced more efficiently and accurately using techniques such as data mining.

'The launch of the web site led to 1500 new clients in three weeks', said McGreevy. 'Six and a half per cent of our unique visitors converted and actually purchased an ISA online'.

Preliminary results for the year to 31 December 1999 show that losses have been trimmed from £1.56 million to £968,000 on turnover up from £5.31 million to £12.79 million. And the underlying business is profitable, a fact masked by the £4.5 million e-commerce investment programme. The traditional business is adding clients at a rate of 3-4000 per month.

House brokers Bell Lawrie White in Glasgow are forecasting a net loss of £1.3 million on turnover of £41 million in 2000, with Inter-Alliance moving into profitable territory the following year. The company hopes to increase the number of IFAs this year from 634 to 888, having seen the number more than double in 1999. It also plans to offer a wider range of financial services products, such as insurance, unit and investment trusts and stakeholder pensions from its website.

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