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A turning point for listed IFAs

Those famously troubled listed IFAs may be about to turn the corner, according to one the most outspoken analysts on the sector Durlacher.

The analyst believes that a combination of improving stockmarkets and cost-cutting measures mark a turning point.

This is great news for almost everyone involved in financial services. The companies&#39 respective managements have struggled recently to convince sceptical but profitable IFAs that their new distribution models could cut the mustard.

If they can, it is great news for shareholders, advisers, providers and perhaps most particularly the public spared the uncertainty of seeing their adviser&#39s firm go under.

Of course, many IFAs, both listed and non-listed, plus networks, support services and franchise organisations, need to do some very serious thinking about how so much money was lost and why they were so exposed to the stockmarket cycle.

Durlacher also says that in many ways the sector remains a disappointment. The groups concerned remain too small to really deliver the sort of power “distributor” companies need to become star stockmarket performers. That is, of course, a market view. The average adviser may be quite content with a mix of players.

But very few IFAs like to see other adviser businesses collapse. The recent public criticisms by some IFAs of particular listed operations reflected genuine concerns about what another high-profile collapse would do the reputation of the entire sector.

Of course, this turn-round reflects the view of one analyst. Some of the firms concerned have yet to post a profit but they are clearly making moves in the right direction. But we will only really know if these businesses can work when they post their first set of results in black ink.

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