IFAP points to growing fee-only demand and welcomes payment transition initiative
- Fee-only IFAs are already getting more high net worth and corporate business leads from IFAP, particularly in the South East-
IFA Promotion today voiced its support for AIFA and IFP’s recently publicised initiative to help IFAs change to a fee payment model for their services. IFAP’s own data, based on the 50,000 plus consumers using its ‘Find an IFA’ searches every month (consumers can select IFAs offering fees or commission or fees-only payment options), reveals the number of enquirers selecting solely to receive details of fee-only IFAs has increased by almost a third in the last year, from 13% to 17%.
In contrast, a mere 2% of IFA Promotion’s member IFA firms currently offer advice paid for on a fee-only basis, meaning that those who do are receiving a disproportionately large number of new business leads.
David Elms, Chief Executive of IFA Promotion, commented: “Whilst only a small fraction of IFAs have adopted a fees-only payment approach, consumers and businesses clearly have more appetite to pay for an IFA’s services on this basis. This clearly demonstrates a gap between supply and demand. It also means that IFAs offering this payment model are cleaning up on new business leads, especially those who deal with high net worth and corporate clients, concentrated in the South East of England.
IFAP predicts that the IFA sector will evolve to meet this increasing demand for fees-only advice, and that the perceived risk to their short-term bottom line is currently the biggest barrier.
He continued, “The opaque nature of commission payments and the resulting misconception that advice comes free of charge has led consumers to devalue the important service IFAs provide. Whilst the menu has gone a long way to improve this situation, we believe the AIFA and IFP’s joint initiative with FT Advance is just the sort of support professionals in the independent sector need to break their firms out of this vicious circle without jeopardising their ongoing profitability.”
IFAP members who make the change to fees-only status should inform IFAP immediately so that these details can be made available to consumer and business enquirers across IFAP’s 50-plus online Find an IFA services. Members can do so by visiting www.unbiased.co.uk/ifa/ifap-membership/amend-profile/ or by calling the IFAP membership hotline on 0870 325 9020
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For further information please contact:
David Elms | Liz Willder/Holly Godden |
Chief Executive | Lansons Communications |
IFA Promotion | 020 7294 3677 / 020 7294 3674 |
020 7833 3131 |
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For expert comment or case studies from over 200 media-friendly IFAs, journalists should call IFA Promotion’s Media Services hotline on
020 7294 3682 or search online in ‘Media’ at www.unbiased.co.uk
1. Independent Financial Adviser Promotion
IFA Promotion was established in 1989 to promote the value and accessibility of independent financial advice to the public. It represents around 9,000 firms of independent financial advisers across the UK and is sponsored by 31 leading financial institutions. In the past 12 months, over 530,000 consumers and businesses used IFA Promotion to find local independent financial advice.
IFA Promotion believes Independent financial advice should be:
- Affordable. The option to take independent financial advice should be available, by right, to all- not just the wealthiest in society
- Convenient. IFAs should be available in the location of the consumer’s choice, wherever they live in the U
- Transparent. It must be clearly transparent to consumers who is able to offer independent financial advice and who is no
2. Independent Financial Adviser Promotion’s sponsors
Aberdeen Asset Management | Mortgage Express |
Abbey | National Savings & Investments |
AXA Life | NatWest Business Banking |
Bright Grey | New Star Investment Funds |
BUPA Health Services | Norwich Union Life |
Canada Life Ltd | Prudential |
The Children’s Mutual | Scottish Equitable Plc |
Clerical Medical Investment | Scottish Life |
Defaqto | Scottish Life International |
Friends Provident | Scottish Widows Plc |
GE Life | Skandia UK Group |
GMAC Residential Funding | Standard Life Assurance Company |
INVESCO Fund Managers Ltd | Unum Provident |
Legal & General | Webline Limited |
London Mortgage Company | Zurich Intermediary Group |
Lincoln Financial Group |
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