Consumers will quickly turn into astute financial services “connoisseurs” by 2008, forecasts a report from Mori Market Dynamics.
Managing director Jon Francis says more education from sources such as media coverage, the internet, Government and product providers will substantially increase consumer knowledge in the next four years.
Francis believes this will change the landscape of the financial services marketplace. He predicts protection and non-life savings will see significant growth while the mortgage market will suffer.
He says the protection market is set to increase by 64 per cent to £1.6bn by 2008 and believes IFAs will be marginalised in this marketplace.
Council of Mortgage Lenders spokesman Bernard Clarke says the CML has forecast growth within the next year but admits that it looks to be modest. He says: “I think we have already started to see consumers getting smarter in the mortgage market. You only need to look at growth in remortgaging where consumers are understanding the benefits of better rates.”
Francis says: “It is clear from the study that while most product areas are forecast to see significant growth, the mortgage market has some volatile times ahead and is currently at a crossroads.”
“In the longer term, we expect that sheer necessity coupled with pressures as diverse as media coverage, the internet, government and supply-side initiatives will increase 'connoisseurship' among financial services consumers.”