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IFAP bringing in leads for £23m commission

Over 315,000 people contacted IFA Promotion last year to look for an IFA, producing up to £23m in commission and £16.5m in profit for members.

According to research by actuaries William M Mercer, the total of people approaching IFAP was up by 20 per cent to 315,000 from 263,000 in 2001.

Of those people contacting IFAP by phone, 43 per cent then contacted an IFA and 37 per cent used the internet.

Once people had met an IFA, they bought an average of 1.4 products, with each sale generating £500 in commission.

Single-premium sales were divided between lump-sum investments at 73 per cent and pensions at 27 per cent. Regular-premium business was predominantly pensions at 89 per cent, with protection products accounting for the remainder.

Mercer estimates that the amount of new mortgage lending which is generated through IFAP is between£360m and £680m.

IFAP says product providers – which sponsor the scheme at a cost of £2.7m a year – get a return of many times their initial investment. IFAs pay a one-off payment to join the scheme.

The research is drawn from 2,876 questionnaires returned by consumers after first contacting IFAP.

IFAP chief executive David Elms says: “2002 was a phenomenal year for IFAs,a year in which we generated 315,000 leads for our IFA members, translating as much as £23m in commission. In addition, in terms of new business generated, our sponsors have seen a return on sponsorship of up to six times. Naturally we are delighted that, despite the downturn in the economy, we have managed to drive up value delivered to our members and sponsors substantially.”

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