Squeezing margins will force IFA networks to move towards multi-ties following depolarisation, losing market share to highstreet banks in the process, according to John Scott & Partners chief executive Toby Strauss.
He told the MM round table that depolarisation would likely have a significant impact on the IFA sector.
Strauss, who until he joined JS&P last year was managing director of Charcol and one of the industry's most well-known commentators, said the banks' offering will improve considerably in consumers' eyes, thereby allowing them to steal market share.
He predicted problems down the road, saying he could envisage an inquiry 10 years from now looking at the construction of multi-tie panels by banks following depolarisation.
Strauss said: “On the margin, polarisation will have a large impact because we are seeing some of the mainstream networks under a fair amount of pressure to make a profit. The banks will probably take some share back at the margin because their offering for the consumer perspective will look better than it does today.”
Round table attendees
FSA managing director David Kenmir
FSA press officer Louise Buckley
Advisory & Brokerage Services compliance David Cant
Central Financial Planning director John Eburne
Central Financial Planning director Ian Smith
Chadney Bulgin partner David Thomas
Direct Life & Pensions sales and marketing director Richard Verdin Hornbuckle Mitchell Group director Viv Belcher
John Scott & Partners chief executive Toby Strauss
Master Adviser director Doug Brodie