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Squeeze on profitability is seen as major threat

Advisers believe the key factors which will enable them to weather the current environment are financial backing and profitability.

They say there are four major changes which businesses must cope with. The first is the squeeze on profitability although they also identify depolarisation and what they perceive as a stronger compliance regime as potential threats to their businesses.

They also believe that providers are under financial duress with stretched financial resources, which means reduced support for the intermediary sector.

But IFAs are also concerned about the lack of consumer trust in the financial services industry and in its products while believing there are many technology-led opportunities.

They think that advisers need clout, which comes from three sources – critical mass, funds under management and marketing.

They also extol the virtues of having a clear business model, which may mean the old sales-driven model is no longer viable.

One national IFA says: “We have to demonstrate to that potential buyer or, indeed, the backers of any particular buyer, that this business is a going concern that has got real opportunity. So a lot of the planning has been based around a three-year programme of demonstrating that if this business does various things, then we will survive during that period.”


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