Advisers unwilling to move to a business basis that is less reliant on provider commission will be forced out of the industry or end up as salaried bancassurer advisers, says FP Advance managing director Brett Davidson.
Speaking at PIMS, Davidson said with provider commission payments getting squeezed and a lack of profitability among many in the market, things are going to get “tougher and tougher”.
He said most advisers were not taking the steps that he believes are necessary to create a more sustainable business, are clinging to a view that there is no problem and will be left at the “mercy of so many forces”.
He said these advisers are likely to migrate into a salaried bank environment, with bancassurers ending up with a firm control of the mid market.
Davidson said: “We are just seeing the tip of the iceberg. It is probably a 10-year journey, so it is not as if you have to jump off the ship tomorrow if you are in that space. But you have to accept that it is going to get tougher and you will have to find another role or change your business.”
Burns-Anderson chief executive Mike Hughes said: “Improvements are needed in the sector to increase efficiency but overall IFAs are doing a good job and we find it too easy to do ourselves down.”