Market analyst Datamonitor has rejected the widely held notion that banks will be the big winners as a result of depolarisation, saying they will fail to take significant market share from IFAs.
Its research published this week finds that the regime relaxation will favour IFAs over the banks, which will struggle to take further market share in pensions and savings products.
It criticises the banks' direct-sales model, saying it struggles to provide best advice on a tied basis and will continue to struggle on a multi-tied basis.
Significant investment would be required by banks to achieve the necessary level of knowledge among their advi-sers if they are to capitalise on the relaxation offered by depolarisation and Datamon-itor says this investment may not be readily forthcoming.
Financial analyst Miikka Metsanvirta says after depolarisation, IFAs will still dominate investment, savings and pension products although banks will most likely make more headway into products easily cross-sold, such as term insurance, critical-illness cover and simple pensions such as stakeholder.
Aifa director of public affairs Tracey Mullins agrees that IFAs will fare much better with depolarisation and the menu. She says the bancassurance channel is a salesforce which cannot compete with the skill of the IFA sector.
Metsanvirta calculates that banks will only reach around 25 per cent of life distribution and under 10 per cent of the pension market while the IFA sector will account for almost 80 per cent of pensions and 60 per cent of single life by 2007.
Metsanvirta says: “Banks will gain some market share from direct salesforces and tied agents but the perceived expertise and advice offered by IFAs will ensure that they retain their market dominance.”