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IFAs set to take on providers

IFAs could go head to head with providers in a move which could be devastating to some of the big players in the market, according to independent research by Datamonitor.

The research says IFAs may launch their own branded products to survive industry challenges such as reduced commission, potential changes to polarisation and poor service standards from providers.

Datamonitor says this poses a major threat to many prov-iders which rely on IFAs as their main distribution channel.

It refers to IFAs such as Hargreaves Lansdown, which has already launched its own investment trusts and Isas. Datamonitor says: “The implications for existing providers if IFAs decide to enter this market would be potentially devastating as they rely on intermediaries for distribution.”

However, it says to win back some of the ground, providers may enter more strategic alliances with retail banks and acquire bigger IFAs.

The research found smaller IFAs have the most to worry about in the future, suggesting they will have to consolidate or join networks to survive.

Hargreaves Lansdown head of research Mark Dampier says: “In the future, Isas will not be offered by the likes of Jupiter. Other large IFAs will be left behind if they do not look to doing the same as us.”

Misys head of marketing Andrew Bedford says: “Some of the large national IFAs might bring out branded products but it will not affect product providers that much. I can&#39t imagine why a network would want to do it as it would lose the advantage of selling products with a big brand.”


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