Aviva claims on IFAs exaggerated |
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Economy
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Written by Gary Howes
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Thursday, 14 May 2009 |
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Friends Provident Chief Exec tells conference that a dearth of finance advisers is unlikely. Aviva (LON:AV) claims that the number of Independent Financial Advisers (IFAs) operating in the UK will fall to 10,000 by 2013 are unfounded says Friends Provident chief executive Trevor Matthews.
Matthews told the Marketforce future of life assurance conference in London that while there will be some reduction in the numbers of operational IFAs the idea that numbers will halve within four years is unlikely.
Aviva originally made the claim that the number of IFAs will fall from 21,000 to 13,000 by 2013 when they said they planned to grow their in-house sales channel to capitalise on the provision gap it believes this exodus will cause.
Financial Services Authority moves against IFAs
The IFA industry is experiencing a major shakeup after the Financial Services Authority (FSA) launched a review, "to address the many persistent problems observed in what is now, over 20 years of regulation of the retail investment market."
The regulator’s retail distribution review has resulted in proposals to divide the market into ‘professional financial planners’, ‘general financial advisers’ and ‘primary advisers’.
The new rules will see a significant number of advisers move out of the industry says Aviva.
Friends Provident believes there is a future
However the shakeup in the industry has not put of Friends Provident (LON:FP)
Matthews said: “I think there will be some reduction but I think half is far too exaggerated. The IFA community is very adaptable and it will adapt to this. If we get this right we will actually be attracting new people into the business and that is very, very positive.
“I think the dream we all have is a much more professional industry that young people coming out of university aspire to get into this game because they can see the massive need out there in the future for financial advice.”
Also at the conference, Legal & General group executive director for protection and annuities John Pollock said the firm was growing its tied sales force in preparation for a “reshaping of the market” caused by the RDR.
He said: “We have a small direct sales force and a reasonably sized tied force and the tied force in the mortgage market has been modestly growing and within some of those firms they have been building wealth advice arms. I think we will see a reshaping of the market. It is pretty clear the RDR will reduce the traditional IFA population quite significantly.”
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