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Low-margin business unsustainable, say IFAs

IFAs say low-margin mass market business such as stakeholder is not sustainable, according to this week&#39s instalment of the Money Marketing/Virgin One State of theIFA Nation poll.

The survey canvassed the opinions of 280 advisers, with 75 per cent saying that mass-market business is not aviable option.

IFAs believe their future lies in more specialist areas and advising high-net-worth clients who need tailored individual financial planning services.

The squeeze on margins is proving a massive pressure on IFA business plans, with

68 per cent saying they are planning to move their business up market because of the inability to operate under the 1 per cent stakeholder cap.

This view has been confirmed by IFAs reaction following the FSA&#39s polarisation proposals. Many are predicting that true IFAs will operate only in the top end of the market and firms will offer a multi-tied arm for mass-market business.

Ruth Whitehead Associates principal Ruth Whitehead says: “We have concentrated on offering an advice service to our customers”.

“We are consolidating on expanding our client base of high-net-worth individuals who want a personalised specialist advice service. It is the IFA&#39s business to provide this – anyone who just wants a stakeholder can use the internet.”


&#39Watchdog price ruling is threat to the market&#39

The financial ombudsman&#39s decision to end dual pricing by Halifax, Nationwide and Abbey National will destroy competition and product innovation in the mortgage market, warns analyst John Wriglesworth.The Financial Ombudsman Service last week threw out appeals from Halifax and Nat-ionwide against its ruling to uphold complaints from individual customers that new borrowers were being given […]

Packagers&#39 body aims to attract TMO and Pink

The new UK Association of Mortgage Packagers has set a deadline of one month to get the two biggest ind-ustry players on board.The trade body was est-ablished last month with the aim of giving packagers a means of lobbying the Government and regulators but the two biggest organisations, Pink Home Loans and The Mortgage Oper-ation, […]

&#39Multi-managers are not a threat to IFAs

IFAs have given the thumbs-up to multi-management products, with only one in six believing they will be a threat to their business.The results come as part of Money Marketing/Virgin One&#39s State of the IFA Nation poll, which surveyed 280 advisers in December.Forty-seven per cent of IFAs polled do not believe that multi-managers would become a […]

In GAD we trust

The Financial Times of January 30 quoted the Department of Work and Pensions as stating: “The rates of rebate (for contracting out) adopted from April 2002 were assessed by the Government Actuary as sufficient to provide a fair reflection of the cost of providing the state benefits forgone…..Changes in the economic conditions would not have […]


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