IFAs will be the winners in the market after CP121 and the Sandler review, according to Prudential.
In a recent presentation to City analysts, the Pru predicted that by 2005, direct salesforces will practically vanish.
It forecasts that the breakdown in distribution in 2005 will be 7 per cent direct, 1 per cent tied, 3 per cent direct salesforce, 22 per cent bancassurance, 17 per cent ex-direct salesforce multities, 15 per cent ex-IFA multi-ties and 35 per cent remaining IFAs.
Although this appears to be a disaster for IFAs, with market share plummeting from 63 per cent in 2001 to 35 per cent, Pru says the true picture would be IFAs increasing their market share by 4 per cent to 67 per cent.
It claims that, under its broadest definition, IFAs will include ex-direct salesforce advisers and former IFAs that have become multi-tied.
UK chief executive Mark Wood says: “We think the IFA in its broadest market definition actually rises over this period.
“Our overall view is that the major winners from CP121 and the Sandler review are IFAs.”
Aifa director general Paul Smee says: “When the current shape of the market seems as unsure as ever, it is premature to speculate what proportion of business will be taken by any particular distribution channel.”