Aifa director general Paul Smee is aiming to allay fears that the IFA market is diminishing and that the number of advisers in the sector will fall following depolarisation.
In a speech to the Insurance Institute of London on Wednesday, Smee said he believes that concerns that the number of advisers in the sector will decrease are completely unfounded, that successful businesses will continue to thrive after depolarisation and the total number of IFAs will stay steady over the next five years.
The Institute of Financial Services backs Smee's prediction, saying that it has seen no decrease in the number of applications received from IFAs looking to be qualified to give mortgage advice. At the end of 2003, the IFS received 30,000 applications from advisers, the majority of which it says are IFAs, to take the bridge paper qualification needed to offer mortgage advice.
Durlacher analyst David Pannell forecasts the number of IFA firms, currently 3,910 firms according to the FSA, will decrease. But Pannell believes we could see an increase in the total number of registered individuals as mortgage and general insurance brokers are brought in to the regulated environment.
Simply Biz chairman Ken Davy says: “Suggestions that the IFA market could disappear are 18 months out of date. I am convinced that the adviser market will remain robust and small firms in particular will do especially well in the new environment.”
Smee says: “The polarised environment has enabled providers to keep the upper hand but after depolarisation the brand of independence will be of the highest value and the number of advisers will remain the same.”