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Bancassurers set to take advantage of depolarisation

Bancassurance will be the winner in a depolarised market, according to a new report from Cerulli Associates.

It says bancassurance has so far failed to come close to having any effect on the dominance of IFAs because of an inability to gain critical mass and a mistrust of large financial institutions.

IFAs, however, have the appeal of the “small business ethos and local proximity” which makes them more desirable to customers who distrust large financial institutions.

The report says depolarisation will be to the advantage of bancassurers which will benefit because of their financial muscle. It would allow for wider product offerings and would result in a move to an independent advice model only for more affluent clients.

Cerulli believes, irrespective of any regulatory changes, that the market is already depolarising with the increasing number of IFA panels.

It says the Government is driving the changes in the need to improve the take-up of savings products and the main argument in favour of depolarisation is to broaden the availability of products.

It points to the Barclays/Legal & General tie-up as a landmark move in the new era for bancassurance.

Ultimately, it sees the consumer as the winner from depolarisation and the resulting step-up in bancassurance propositions.

The report says: “The consumer is likely to be the winner as pressure mounts to reduce costs, including those of distributing products – bancassurance can bring with it benefits of scale and lower cost.

“Depolarisation could play to the advantage of bancassurers.”

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