2013-01-16 11:49:14 - UK IFA market dominating 75.4% of the total life and pensions industry
The UK IFA market has grown at a compound annual growth rate (CAGR) of 6.8% between 2007 and 2011, rising from a valuation of Â£1.8 billion, to hit a market value of Â£2.3 billion in 2011.Independent Financial Advisers (IFAs) are professionals who offer independent advice on financial matters to their clients and recommend suitable financial products from the whole of the market. The term was developed to reflect a UK regulatory position and has a specific UK meaning, although it has been adopted in other parts of the world, such as Hong Kong.The term "Independent Financial Adviser" was coined to describe the advisers working independently for their clients rather than representing an insurance company or bank. At the time (1988)
the UK government was introducing the polarisation regime which forced advisers to either be tied to a single insurer or product provider or to be an independent practitioner. The term is commonly used in the United Kingdom where IFAs are regulated by the Financial Services Authority (FSA) and must meet strict qualification and competence requirements.The distribution of life and pensions products is heavily weighted among independent financial advisors (IFAs). In 2011 IFAs accounted for 75.4% of the total life and pensions market, while banc assurance accounted for just 9.3%.In preparation for the new financial advice regime that starts in January 2013, advisers across the country are preparing to dump their unprofitable clients. If clients have investments worth less than Â£500,000 then they could be affected by the changes.The latest big gun to pull out of the financial advice market is Lloyds Banking Group, which is to axe its mass-market investment advice service from November. Barclays Bank has already pulled out of the face-to-face advice market, moving to selling investment products over the internet.The banks´ decision to withdraw from the advice market is a response to industry research that shows mass-market investors have no appetite for paying fees for independent advice - up until now they have paid via commission on products, but the new advice regime will stop this.For more information on the UK IFA market, see the latest research: UK IFA MarketFollow us on Twitter @CandMResearch
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