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Can IFAs survive without getting stuck in a niche?

IFAs ignore Norwich Union&#39s chief executive Philip Scott at their peril.

Scott, who heads the UK&#39s number one IFA life office, told advisers at Aifa&#39s annual conference they must either get big or find a niche market.

More ominously, he described the middle ground as “increasingly dangerous” territory, as a result of Cat-standard products, lower margins and commission and the challenge of technology.

Encouragingly, Scott characterises the changes IFAs face as opportunities, not problems. But the choice between finding a niche or getting bigger is a stark one.

With tight stakeholder margins and endowments facing constant criticism,the middle-ranking, middle-market IFAhas a lot to think about.

Some already seem to agree with Scott&#39s conclusion and have moved under the protective umbrella of bigger organisations while many regional IFAs have merged.

NU&#39s advice may well be sound but for those who do not want to join a bigger organisation, there are only so many niches, even in a market as diverseand as technical as financial services.

If any group of professionals deserve the title of the awkward squad, it is IFAs. But it is this awkwardness that has helped create and maintain a varied and competitive marketplace across all product ranges.

It would be a great shame if that influence was lost from the mainstream retail market in favour of a few giant organisations and a few hundred specialists. IFAs should pay heed to what Scott says, but in this instance, Money Marketing hopes he is wrong.

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