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‘Most IFAs should stick to mortgages and GI’

Prestbury chief says economics of being independent do not stack up for 70% of advisers

Around 70 per cent of IFAs should give up the independent label to become mortgage or general insurance advisers, says Prestbury chief executive Lee Birkett.

He says most advisers would benefit from limiting their advice to low-risk mortgage and GI rather than the full range of investment vehicles as the figures do not stack up for them to provide full advice.

Birkett says his e-based approach to business, which concentrates solely on mortgages and GI, has allowed him to double his profit while halving his overheads.

The Cheshire-based network has around 200 advisers turning over around £50,000 a year.

Birkett has also hit out at multi-tie panels, saying they do not meet consumer demand.

He says if clients are given a choice of a single provider, a handful of providers or whole of market, they will always choose whole of market.

He says it is unfortunate that many multi-ties have been set up and are being supported financially by product providers that have paid up-front lump sums to be included on various panels.

Birkett says: “We do not do any IFA business now, only low-risk mortgage and GI. I think 70 per cent of IFAs do not need to be IFAs. The economics simply do not stand up.

“Not enough advisers are embracing technology and that is why not enough advisers are making money.”

Birkett says many IFAs are looking for off-the-shelf technology solutions that do not exist. He says: “It is through e-commerce consolidation that we are running such a profitable model. We have been developing our internet platform and website internally for years. There is no off-the-shelf solution that fits all advisers’ needs.”

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