Advisers’ sales share rises as banks plunge

Advisers’ market share increased to over 40 per cent of total retail investment product sales in the year to March, as banks and building societies saw their market share shrink.

The FSA’s product sales data, published last week, shows that between April 2010 and March 2011, personal investment firms, which includes IFAs and multi-tied advisers, sold 43 per cent of the 2.7 million retail investment products sold during the year.

Personal investment firms had a 39 per cent market share of retail investment products sold during 2009/10.

Banks and building societies saw their market share fall from 29 per cent in the year to March 2010 to 22 per cent, mainly due to a loss of Isa business to personal investment firms.

It is likely that advisers’ market share is greater than 43 per cent as sales via platforms were excluded from the data.

The FSA says: “It is important to bear in mind that these figures exclude platform sales, which could exaggerate the market share of banks and building societies against intermediaries such as personal investment firms, which are more likely to use platforms.”

Pensions were the most commonly product sold across the board, accounting for 36 per cent of total product sales. Personal investment firms accounted for 58 per cent of personal pension sales.

Sipp business saw the most pronounced growth overall, with the number of Sipps sold up by 34 per cent year on year. Occupational pension business was up by 24 per cent, personal pensions up by 23 per cent and group pensions by 16 per cent.

But sales of income drawdown and annuities have fallen by 15 per cent.

The FSA says the increase in pension business is likely to be down to pension switching rather than new pension investment.

Isas accounted for 22 per cent of total product sales and decumulation pensions 13 per cent. Trusts and Oeics business represented 11 per cent of total product sales.

Thameside Wealth director Tom Kean says: “I think IFAs will only increase their market share. We are a pretty resilient lot and we have had nothing but change in the last 20 years, so we will take the RDR on the chin and our businesses will continue to thrive.

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