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&#39IFAs will lose market share to bancassurers&#39

Product providers are predicting that IFAs will lose market share to bancassurers over the next five years, according to a survey of delegates at the Institute of Economic Affairs&#39 life assurance conference.

The poll of high-level life industry executives, consultants and FSA representatives shows that 87 per cent predict a marked increase in the market share of bancassurers while 66 per cent foresee a reduction in IFA market share. Only 21 per cent expected IFAs to retain market share, with 3 per cent not expressing a view.

But 34 per cent of delegates said they believe wrap platforms will transform relations between IFAs and product providers, with the balance of power shifting to advisers. However, 25 per cent believed the ball would remain firmly in the providers court.

The research, which covers the views of 17 UK life companies, was carried out by Atos KPMG Consulting and shows 60 per cent of delegates expect a sharp reduction in the volume of unit-linked life savings and investment products over the next five years.

Capital constraints will be the main driver for change in the life industry followed by Government intervention and regulation and the increased role of the banks, delegates said.

Atos KPMG Consulting director of financial services Malcolm Kerr says: “Bancassurers are likely to benefit from polarisation changes and their ability to sell lighter touch products. But life companies feel threatened by wrap products and how they could shift power towards IFAs.”

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