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IFAs diversifying into general business to replace lost sales

Sofa is reporting a big increase in IFAs diversifying into general insurance and protection products, as advisers try to make up for the drop in revenue in traditional business areas.

It says the lack of appetite among the public for investments is motivating more IFAs to move into product areas such as protection and private medical insurance, motor, household.

Sofa managing director Brian Lawless says while the increase is difficult to quantify, conversations with IFAs have shown that it is “considerable”.

He says that there are still reasons why people should be investing, such as shifting existing holdings into more tax-effective areas, but the turbulence in the markets has put a lot of people off.

He believes that the bad press that pensions have received has also been responsible for the lack of pension business.

Lawless says IFAs still “have families to feed” and are looking for other ways to make money, with general insurance and protection products being easier markets, particularly as they are unregulated.

The move could work against the Government&#39s quest to close the savings gap as people switch money from savings to protection, warns Lawless.

He says: “We welcome this move as it provides a more holistic financial planning proposition. This will not suit all customers or advisers but, for a client looking for general support with financial planning, this move is very positive.”

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