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Virgin Money shutting doors to new business

IFA supermarkets are predicting more consolidation among their direct rivals after Virgin Money announced it plans to close to new business in the new year.

Virgin said the decision came as the result of a strategic review of the company, which concluded that the group would focus on its own Isas going forward rather than the products of other providers.

The supermarket, which was started in June last year, offered direct investors the chance to invest in unit trust and Oeic Isas at no initial charge.

However, the platform did not offer online dealing. Inst-ead, investors would simply have the chance to download an application form or register their intention to buy.

Virgin Money will continue to offer mortgages, pensions and loans but its Isa range will be restricted to its own tracker funds.

Virgin Direct communications manager Andrew Stron-ach says: “This is basically as a result of a strategic view of what we do and how we do it. It became clear that most people that use the fund supermarket were going on to buy Virgin Isas, so we decided to focus on our own products going forward.”

Fidelity marketing director David Cowdell says: “The supermarkets that just cater for the direct market will struggle. I would not be surprised if we are about to embark on a period of consolidation like we saw in the US.”

Cofunds head of sales Rodney Aldridge says the news confirms the continued demand for investment advice.

He says: “Our belief is that while there are a small number of self-directed investors out there, there is still a huge market for advice.”

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