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IFAP&#39s hotline brings in £13m for advisers

IFA Promotion&#39s consumer hotline generated between £7m and £13m of

commission for IFAs in 1999, according to actuaries William M Mercer.

The company also found the organisation increased profits for product

providers by up to £11m last year.

The calculations were made using the results of a questionnaire which was

sent to a sample of more than 8,000 consumers who had contacted the IFAP

hotline to get details of reputable IFAs in their area.

Mercer calculated from these results that, of the 91,831 consumers who

contacted the IFAP hotline in 1999, a total of 37,651 or 41 per cent went

on to visit an IFA.

Half of these visits led to purchases of financial products. On average,

each purchaser bought 1.6 products.

Mercer used this data to make two projections of the amount of commission

earned by IFAs. The first was a lower calculation assuming that

non-respondents were half as likely as respondents to have purchased a

product. The second was a higher calcula- tion assuming that non-resp-

ondents are equally likely to have made a purchase – hence the range of

commission and profits given.

IFAP says the figures demonstrate that it makes a contribution to the

industry far in excess of its running costs. Product providers give £2.5m

to IFAP each year. IFAs do not make a contribution.

IFAP managing director Ann-Marie Martyn says: “1999 was our most

successful year ever and 2000 looks like beating even that. These new

numbers from William M Mercer demonstrate what we have said all along –

that IFAP is good value for the industry and, in particular, for IFAs who

pay nothing towards our running costs.”

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