Providers fail to meet client needs

Product providers are particularly poor at identifying clients’ needs when designing new products, according to research for Money Marketing by PIMS.

Only 5 per cent of IFAs believe that providers have the right level of contact with customers when designing products, compared with 33 per cent who say providers are not in touch with clients’ needs and 62 per cent who feel that providers could do more.

Sixty-six per cent of IFAs believe that insurance companies will not be the best providers of pensions after A-Day.

Reasons given include “poor service, poor investment track record, lousy staff”,inadequate investment structures, and “cumbersome and low service standards”.

But the research also reveals that 71 per cent of IFAs believe they are ready to cope with the depolarisation menu payment system, with only 13 per cent saying they are not ready.

Wraps are also shown in a positive light, with 36 per cent thinking that over half of their business will be conducted through wraps over the next five years compared with 20 per cent last year.

Ninety-one per cent of IFAs plan to grow their business in the next 12-24 months, consistent with last year’s finding of 92 per cent.

Sixty-six per cent of IFAs say they will not be multi-tying, despite the fact that most IFAs use only six to eight product providers for around 90 per cent of their business.

Eleven per cent of respondents say that the costs of the Financial Services Compensation Scheme are likely to make them move their business to a multi-tie model.

PIMS project director Evie Owen says: “The research shows that IFAs are aware of the issues affecting them and are addressing them.”

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