Banks and insurers have realised the potential earning power of advice propositions and are reviewing their direct-to consumer models, says Ernst & Young.
Speaking at the launch of Aifa’s latest RDR report, Advice Horizons, last week, Ernst & Young director of financial services Robert Wood said advice propositions are becoming more attractive to providers.
He said: “Banks and insurers have understood that the most money can be made from the advice end of the value chain. They will be looking at how they can structure their direct business to make the most of that.”
Paladin Financial Services managing director Tim Purdon says if insurers and banks actively target consumers, the public will be increasingly confused about the different advice services available.
He says: “This would just add further confusion to the marketplace. Will banks encroach on my market? I do not think so. My clients are looking for a personal service that only IFAs can provide. There may be a gap in the market for a man from the Pru type service but I think IFAs will aim for the higher end of the market, so there would not be too much crossover.”