Transact head of marketing Malcolm Murray says another 12 players will enter the wrap race by 2012 and claims the sector is “nowhere near saturation point”.
He says all the major life offices are bound to enter the platform market in the next year or so.
He says: “Say we have 12 platforms players at the moment, I reckon over the next year and a bit there will be another 12. All the life companies have got to come in just to save their necks.
“They will not all succeed and that is not because there is not enough business. The problem is differentiating themselves. We have only got four software providers so they will all look very much alike. “They are going to have to compete on price and service because the rest of it is so commoditised now and the fewer software houses that drive these wraps the more commoditised they will become.”
Threesixty partner Phil Young says there will be new entrants but they will have to be “niche or incredibly innovative” to succeed.
He says: “Service is a very nebulous concept and implies a track record, so it is difficult for a new entrant to compete on that alone. Price is the most obvious way to compete but this is a very dangerous path.”
Thomas and Thomas managing director Darren Lloyd Thomas says: “IFAs’ main concern when choosing their wrap is durability and in the current climate of non-re-registration- friendly offerings, the impact of having to move could potentially finish an IFA firm off.”