August 2007
This month’s topics
IFAP August 2007 Update e-newsletter
Welcome to Update, IFAP’s regular e-newsletter for member IFAs. So far, 2007 has been a busy year. Much of our efforts for the first half of the year have focused on delivering media and lead value to members and ensuring consumers seeking financial advice understand recent changes to the marketplace and continue to value the importance of independent advice.
Throughout the newsletter there are links to our up and coming plans and campaigns and information on how you can get involved. Most importantly, you need to ensure that the information we're providing to consumers about your firm, through our 'Find an IFA' services, remains up to date.
The last few months have been particularly busy in terms of industry developments, following the publication of the FSA’s Retail Distribution Review and its scrapping of the Menu and IDD. As ‘the’ organisation promoting the benefits of independent financial advice to consumers, IFAP’s monitoring these developments closely and is proactively engaging to ensure ours – and consumer’s – voices are heard. More on this later.
Reacting to the needs of consumers is of course a priority for us, in terms of ensuring the continuing success of Unbiased.co.uk and our promotion of the independent message. Therefore it’s great to hear that our decision to introduce a new, simplified, easy to use qualifications ranking (see June’s Update) has been validated by independent research; over one in four consumers who visit Unbiased.co.uk now specify that they want to receive details of member IFAs holding qualifications / designations incremental to benchmark Cert FP (FPC 1/2/3).
Given this, ensuring your IFAP entries remain up to date and provide accurate details of the top nine advice areas you cover and the incremental qualifications / designations you hold is therefore even more crucial. Independent research conducted by strategy consulting firm Oliver Wyman reveals that Unbiased.co.uk’s consumer and business ‘Find an IFA’ tools generated an estimated £71 million worth of commission income for member IFAs in 2006. Read on to find out more about how you and your firm can capitalise on these leads.
If there is anyone else in your organisation who you think would like to receive our Update e-newsletter, please direct them to www.unbiased.co.uk/email/
IFA Promotion News
FSA: MENU
In June the FSA announced that it was to axe both the payment Menu and Initial Disclosure Document (IDD). Naturally, IFAP is concerned about what will replace these initiatives.
Regardless of how they were implemented, we should not lose sight of the fact that both these initiatives set out to add clarity for consumers - about who was providing the financial advice service and what products and services an adviser could advise on. The Menu and IDD made it clear to consumers that the advice would need to be paid for one way or the other, either through fees or commission (or some combination there of). This inevitably encouraged more advisers to better explain the value of their service, which in turn has led more consumers to be open to paying for advice by offsetting fees with commission.
In response, IFAP is looking forward to working with the industry to ensure that any replacement system continues to meet the original consumer objectives of the Menu and IDD.
FSA: RDR review
The FSA also published its Retail Distribution Review proposal in July. A key suggestion within the review was that some advisers could be entitled to be called ‘independent’ and yet not offer whole of market advice – this could include some advisers who only offer the products of one single company. In response, IFAP argued that (whatever else ‘independent’ might also mean) this particular proposal from the FSA was counter intuitive and risked adding to consumers’ confusion.
This argument was supported by independent research (commissioned by IFAP), showing that two-thirds (67%) of consumers believe ‘independent’ in the context of independent financial adviser means the ability to have unrestricted access to the whole of market. Only one in twelve (8%) believed ‘independent’ means ‘does not receive commission’.
By using Unbiased.co.uk over 600,000 consumers a year already demonstrate their understanding of the value they place in the current meaning of independence (i.e. whole of market, not payment linked). Underlining this, over 75% of these enquiries come from third party referrers, including the Financial Services Authority.
Confusingly, at the end of July, the FSA appeared to announce that the term ‘independence’ in the context of independent financial adviser (IFA) would apply to those advisers that look across the whole of the market (Policy Statement 07/14).
Was this a victory for common sense? Was this the FSA apparently clarifying that the term independent will only apply to those advisers offering the gold standard of advice by choosing the most appropriate product for their clients from the whole of the market? Time will tell. Rest assured, to avoid risking further consumer confusion being introduced in this area, IFAP will continue monitoring RDR developments closely and responding accordingly.
What people do next after using IFAP to find a local member IFA...
Although we know that around 600,000 consumers use IFAP to find an IFA every year, it’s very important for us and of course you, our members, to know what happens to these enquirers after they’ve used our service.
To gain insight into how consumers looking for independent financial advice behave we commission annual research amongst our enquirers via Consensus Research. The full results of this year’s research can now be viewed in the research centre on Unbiased.co.uk. Here are some of the findings:
- Two in five consumers went on to see a member IFA after finding their details on Unbiased.co.uk (or one of the 55 white label versions of the service running on partner websites)
- Location still dominates in terms of which member IFA consumers choose, with 70% of enquirers making their decision based on how close a member IFA was to their nominated post code. However, specialist expertise and quality of information on member IFA’s websites are now becoming increasingly important factors
- During 2006, the top product areas by which enquirers selected member IFAs included pensions and retirement planning, investments and mortgage (and re-mortgage) advice
Important: the satisfaction levels experienced by people who go on to see a member IFA remain very high. The research base of enquirers who used IFAP’s ‘Find an IFA’ service is a robust 1,889 enquirers - split 438 offline: 1,451 online (reflecting the fact that 92% of IFAP’s fulfilment is now online).
Unbiased.co.uk generates record returns for member IFAs
Independent research conducted by strategy consulting firm Oliver Wyman estimates that last year Unbiased.co.uk created a staggering £71 million worth of commission income for its member IFAs. That’s a 32% increase on the previous year and a massive 373% increase since 2000!
The research is based on proprietary market research, as well as over 1,800 questionnaires returned by enquirers who had used IFAP’s online and offline ‘Find an IFA’ searches.
The figures show that an estimated 42% of Unbiased.co.uk’s online and hotline enquirers went on to visit a member IFA, buying an average of 1.59 products per person, up from 1.45 in 2005.This analysis clearly demonstrates that the value added by IFAP for member IFAs has increased by 373% since 2000 – an indication of the increasing benefit of a listing on Unbiased.co.uk. In addition, Oliver Wyman estimates that the individual commission per sale also increased - by 34% - to an average of £900.
These figures clearly highlight the crucial role independent financial advice continues to play in consumers’ financial planning and that the Unbiased.co.uksearch (and the 55 white label versions of the service running on high profile consumer websites) are adding real value to our 8,500 member IFA firms.
IFAP’s Online Marketing Package
If you still don’t have a web presence, and you still haven’t subscribed to IFAP’s Online Marketing Package (OMP), I’m afraid you’re going to continue losing out.
The internet is often the first port of call for consumers researching their financial advice options – over 90% of all IFAP ‘Find an IFA’ enquiries are now being dealt with online. With this in mind it’s worth ensuring your online offering is of the highest quality possible (and that your website is properly plumbed in to the net).
Having a website is simply not enough; you’ve got to ensure potential new customers, who may not have heard of you, can find it. This is where IFAP’s Online Marketing Package (OMP) fits in to your firm’s marketing plan. The OMP offers an enhanced service which is applied to members’ entries on Unbiased.co.uk and the 55 online white label versions of the search. Users of our services can select to be shown only details of matching local IFAs who have displayed their email and website details on IFAP’s searches. This means that if you haven’t yet signed up to our OMP, you will almost certainly already be missing out on potential new business leads.
OMP subscription means your firm’s offering is properly visible online, across UK search engines. By way of example, try going in to Google and typing in ‘Find an IFA’ (UK search) – 80% of the returned links over the first three pages of search results are either Unbiased.co.uk or white label versions of our service running on partner websites. Either way, you win.
For an annual outlay of £249 + VAT you can promote your company details on all IFAP-run searches. With the average IFAP case worth £900 (source: Oliver Wyman 2007, see above), you need less than the value generated by one IFAP originated lead to pay for a whole year’s subscription. Benefits of the package include enhanced display, enabled web and email links, and a call-back facility. Click here for full details or call the member Hotline on 0870 325 9020.
By subscribing you’re not only promoting your business more cost effectively – you’re also helping support the consumer brand campaign for IFAs (your brand campaign!), which each year is generating over 5,000 pieces of media editorial positioning IFAs and the advice process in a positive light (see more below). For this reason alone, if you’re not already subscribing, we would call on your support. Remember, IFAP remains a not for profit organisation.
This month’s topics
Joint initiative with FSSC – qualifications simplification
In June’s update, I announced the launch of a new, simplified, qualifications search on all IFAP’s ‘Find an IFA’ services, making it even easier for consumers to understand the level of incremental qualifications / designations member’s hold, helping them to find the right member IFA for their needs.
The simplified new search applies to around 50 different IFA incremental qualifications/designations currently available across eight different awarding bodies.
Since then, independent research conducted by YouGov has endorsed our decision to introduce a simple two tier ranking for IFA qualifications / designations. This shows that there is a real appetite from consumers for an easy way to understand the world of independent financial advice with 75% believing it is important for an IFA to have incremental qualifications. Amongst those that have used an IFA in the past 12 months, this increases to 87%.
This is also supported by our own new figureswhich show that one in four consumers visiting thesearch now specify they want to receive details of member IFAs with incremental qualifications / designations above those required by law to be an IFA. With over 600,000 searches made each year this equates to 150,000 consumers who are demanding a more qualified IFA.
These statistics demonstrate that, as always, we were acting in the consumer’s best interests when we developed our new qualification search. We expect to see the number of consumers requesting a more highly, and relevantly, qualified IFA increase due to our new facility.
Indeed with the Retail Distribution Review shining a spot light on IFA qualifications – the launch of our new search has proven very timely. Prior to the new qualifications search facility on Unbiased.co.uk, the consumer was faced with a bewildering number of qualifications from many different awarding bodies. The new search means consumers are able to compare all of these to the qualifications they are familiar with, for example A-Levels and components of an undergraduate degree.
The market sectors where consumers are most interested in finding an IFA with a relevant incremental qualification are:
- Long Term Care – 36% of consumers searching for an IFA who has expertise in Long Term Care request they have the relevant incremental qualification
- Equity Release – 25% of consumer searching for an Equity Release IFA request relevant incremental qualifications
- For Pensions it is 24%
- Tax 23%;
- Mortgages 22%; and,
- Savings and Investments it is 17%
IFAP’s growing online presence
Since the last edition of Update we’ve continued building our online presence to ensure Unbiased.co.uk maintains strong brand awareness amongst consumers.
Therefore I’m delighted to announce the addition of two further ’Find an IFA’ white label searches on two high profile consumer websites – Timesonline.co.uk and Londonstockexchange.com.
As you know, placing IFAP online content (editorial, tools, microsites, guides, etc) in the personal finance channels of partner websites and portals is a key priority for us and we’ve continued to build on the great relationships we’ve developed with a number of websites – including BBC, GuardianUnlimited, MSN, Thisismoney, Yahoo, Tiscali and AOL – providing new and up-to-date editorial content plus also securing positioning for our new Financial Age Tool.
We’re continuing to discuss partnership opportunities with many more key money and industry websites and will keep you posted on progress.
This month’s topics
Keeping independent financial advice in the news
Annual media coverage review; the role of Media Services
Our annual review of media coverage achieved within the last year (June 2006 – May 2007) has once again seen fantastic results with IFAP’s Media Services going from strength to strength. During the period, IFAP generated a total of 5,605 items of coverage of which 4,106 items were from printed media (press) and 1,499 items were on the internet. Most pieces were between 97 per cent to 100 per cent positive, which is an excellent result overall!
Throughout the year IFAP’s Media Services, without whom this level of coverage would not be achieved, has continued to successfully provide journalists with informed IFA media comment and case studies through three main services:
- The Media Services Hotline
- The published Media Services Directory which is distributed annually to 1,000 national, trade and consumer journalists
- The online 'Find a Media Services IFA' directory at Unbiased.co.uk which is also reproduced as a ‘white label’ online search in the media areas of 19 product provider, trade body and media portal sites.
These three services combined provided easy access for journalists to media friendly IFAs and huge numbers of media opportunities for the Media Services IFAs listed throughout the period. Indeed a recent survey of 206 leading personal finance journalists, conducted independently by MORI, revealed that four out of five (84%) of these journalists used one or more of these services regularly.
Media Services is a vital part of IFAP’s PR programme and is very much reliant on the time and contribution of its 220 dedicated Media Services IFAs who assist the media in a number of different ways: from offering informed comment on a wide range of financial issues to providing specific advice for individuals via the various ‘Ask the experts’ sections (print and online) that Media Services regularly liaises with.
IFAP Media Services is always keen to work with IFAs who are prepared to comment on issues and work with the media. IFAP is currently updating its Media Services Directory – ‘Blue Book’ - for 2007/2008, which will be distributed to journalists at the beginning of October. If you missed the opportunity to add your profile to the new edition then click here to sign up immediately to the online directory.
IFAP TaxAction 2007 update
Unbiased.co.uk’s TaxAction campaign continues to concentrate on the UK’s major tax concerns, providing a range of practical tips on how to ensure the general public can make tax work best for them.
Our release to coincide with this year’s Tax Freedom Day on June 1st listed useful tips on how consumers can reduce their tax burden. Tax Freedom Day marks the point when we stop working for the Treasury and start working for ourselves, meaning that the average Briton has to work a full five months of the year solely to pay the tax man. Last year, it fell on exactly the same day, showing that UK consumers are still seeing no improvement in the tax burden we face.
More recently we’ve looked at tax waste relating to pensions and what consumers can do to ensure they make the most of the tax incentives offered to pensions savers. And to coincide with the holiday season we focussed on ‘green meanie’ consumers – highlighting that only one in five air travellers are happy to pay ‘green tax’ on ‘carbon-miles’ air travel – with the story being covered on BBC, Reuters and Sky News plus numerous regional newspapers.
Other stories throughout 2007 will focus on key personal finance issues in relation to taxation such as share schemes and Child Trust Funds.
Please visit www.unbiased.co.uk/taketaxaction to find out more about our ongoing PR campaign and how you can get involved.
Get Saving!
This year’s Get Saving! campaign continued with a number of releases focussed on encouraging the nation to save rather than spend! Bargain Bragger Briton, looked at how Britain has become a nation of bargain proud shoppers. We also looked at Britain’s budgeting behaviour: the barriers to savings and what we are doing to keep a check on our finances.
June also saw an update of our quarterly Savings Brake trends, which looks at the ratio of how much we are borrowing, not including mortgage debt, contrasted with how much we are saving. The latest set of figures (Q1 2007) showed that for every pound UK consumers save they are now borrowing 41 pence up from 35 pence in Q4 2006 – with total consumer debt taken out in the first three months of this year now a startling £15 billion! With four rate increases occurring since end of last year it will be interesting to see how they impact on Q2 2007’s results – look out for our update coming soon.
We also sent out our ‘Financial Management’ press release, which looked at the types of financial savings vehicles owned by different groups of society. Our research found ISA uptake over the last five years has increased by 15% with ‘baby-boomers’ topping the list of ISA holders – over 40% now own an ISA.
Our interactive website Unbiased.co.uk/getsaving provides a series of savings and thrift tips (how much you could save a year by sacrificing your morning coffee etc), a budget calculator which shows realistically what you should have available each month for saving, and advice on the many ways in which people can start to save.
There’s plenty more Get Saving! news to watch out for - look out for our next releases on Debt Awareness, Celebrity Role Models and Student Debt.
Visit www.unbiased.co.uk/getsaving to find out more about the campaign.
And don’t forget, IFAP Media Services is always looking for IFAs to provide comment to the media not just on our two headline campaigns but on a wide range of financial topics. If you would like to get involved then please contact us on mediaservices@ifap.org.uk.
Podcasts
The first podcast in our new series - ‘How to Find an IFA’ with Justin Modray of Best Invest – is now live. Over coming months we’ll be adding to the series with further podcasts on savings, pensions / retirement planning, investments, mortgages and tax planning. We have already selected Media IFAs to present these but if there’s a topic that you would like to talk about and you can come to London for the recording, then please do contact IFAP media services on mediaservices@ifap.org.uk.
Press Clubs report
IFAP’s regional Press Clubs work with local media, forging strong relationships with regional newspapers to help promote independent advice and local IFAs.
IFAP members who have not read about or experienced the benefits of belonging to a Press Club, should read our guide - “The essential guide to raising your IFA business profile with local media” – download a copy now.
This month’s topics
News from around the country
Tayside & Fife: This longstanding Press Club continues to publish features within The Dundee Courier six times a year. The Club has recently agreed a further campaign in 2007/8 with the prospect of increasing its output should the paper introduce a tabloid version.
Edinburgh: The Press Club continues to publish its six page Independent Financial Advice special on a quarterly basis in The Scotsman, which appears within the Saturday Money section of this popular Scottish paper. The feature contains articles written by members and also a number of pro-IFA articles produced by established financial journalists. The Club will shortly be embarking on a new campaign and is looking for new members to contribute.
Norwich & Norfolk: Initial discussions have taken place with the Eastern Daily Press regarding the prospect of forming a Press Club in the area. The paper has recently introduced a four-page financial section which is published on Saturday and provides an ideal platform for Press Club copy to be featured. Subject to agreeing a satisfactory campaign with the paper, members in the area will be contacted to form a Press Club. Any member who might be interested is asked to contact the regional press officer.
Chester: Discussions have been held with a leading magazine group in the area about the prospect of producing a regular double-page feature for one of its leading regional titles six times a year at an attractive price. Again, interested members should contact the regional press officer.
Newcastle-upon-Tyne: This Press Club, now in its second year since reforming in 2006, continues to produce a full page monthly feature for The Journal. The small but enthusiastic team has quickly developed an excellent page with plans now agreed for the remainder of this year.
Leicester: One of the oldest Press Clubs, it has produced a monthly full page feature in The Mercury for over 12 years. Members have enjoyed excellent support from the paper and reader feedback continues to be positive.
Aberdeen: The Club continues to produce an excellent full page on a bi-monthly basis for The Press & Journal. Members have recently held their annual Charity Golf Day and as a result of this event expect to donate around £1,000 to local charities. The Club will be holding its AGM in November where activity for its 2008 campaign will be agreed.
For information on any of the above activities or to join a Press Club in your area please contact IFAP Regional Press Officer James Sharp at james@ifap.org.uk or Tel +44 (0)1902 850053
Forthcoming Press Club meetings.
- August 29th Bournemouth
- September 4th Liverpool & North Wales.
- September 5th Portsmouth
- September 6th Suffolk, Ipswich
- September 18th Cambridge am, Surrey pm
- September 20th Aberdeen
- October 3rd Glasgow
- October 4th Edinburgh
The bottom line
So far this year we have seen record numbers of requests for local IFAs and the demand for independent financial advice continues to grow. Our priority is to continue ensuring that the message that independent financial advice is the gold standard of advice is heard loud and clear wherever possible.
We’re continually developing new tools, forging new relationships with journalists, moving our marketing plans forward and producing new research campaigns to make sure this message reaches consumers across the UK.
With so much activity going on there’s almost too much to report in Update alone! However we’ll end here and keep you posted in our next edition where we’ll be focusing on the success of our Media Services initiatives.
In the meantime do look out for our new edition of the Media Services ‘Blue Book’ online, due in October, and if you have any feedback on Update or any other issue then do please let us know.
David Elms
Chief Executive @ IFA Promotion
(david@ifap.org.uk)
