Internet takes over from advisors

EdInvestor

Banks the big losers as more people turn to sites like this for advice

http://www.ft.com/cms/s/0/5e9d97e4-c7c3-11dc-a0b4-0000779fd2ac.html

dunstonh

I think you need to take it with some context.

Demand for advisory services has fallen across the board, with more than half of the 2,000 Britons surveyed saying they have no financial adviser - up from one-third five years ago, according to research by ComPeer, the wealth management -analysts.

Has demand fallen or has supply fallen? In the last 5-10 years we have seen the closure of most of the tied salesforces other than the banks and a few straglers. The number of advisers in the industry is about a third of what it was.

Independent financial advisers have the biggest market share as main advisers, at 16 per cent of all income levels and 25 per cent of high earners.
But these figures are also slightly down from 2003.

Thats a strange one because they are saying internet is up but the internet sites are run by IFAs. It also doesnt match other research which shows IFAs are accountable for 80% of transactions in the UK with 20% of that being execution only. I wonder if the stats in the article are including products and investment types which are unregulated or not classed as packaged.
That would account for the differences.

Although if you read the article it appears that it is research based on questions asked. Given that the average consumer seems to have a problem knowing the difference between mortgage advisers, IFAs, tied agents, insurance brokers, intermediaries, discretionary investment managers and stockbrokers (and any others I apologise for leaving out), relying on them for reliable information on stats like that is not a good idea. Its good to work out the perception but not the stats related to who provides what.

Its good that the perception towards banks is going down but the article doesnt actually say that the banks are getting less business.

Alfie_E

Similarly, some insurance brokers have been having a moan (again). Pressure from the British Insurance Brokers’ Association means that Price comparison sites face probe.

dunstonh

There is some merit in the reason for the probe. Although I doubt much will come from it apart from perhaps an increased number of warning messages.

Some products are very much price influenced but some of these portals list mutliple product types in the same list and sort by price and make an assumption which may not be the same in each product. i.e. listing reviewable, renewable and guaranteed premiums of life assurance in the same list which is then shown in order of price.

However, with the RDR on the way its possible that quote portals will be caught up in that more and regulation will take it into account. There are proposals to introduce simplified products which can be sold under a lighter touch regulation and the more detailed or more complicated products sold under a higher regulation. With the former removing the ability to complain to the FOS the online portals more find the lower cost of regulation is more attractive than the cost of higher regulation of the more detailed products. There have been noises coming out of the FOS that even a nod towards a product could be considered as advice by them. So, sorting the list by price could be classed as a nod towards the top.

As I said, I don't expect anything to come from it apart from more warnings.

SpinnerB

I've been viewing the forums here for a number of months trying to get my head around savings and investing having become debt free last year and must say that I find threads when dunstonh and EdInvestor get going have proved to be the most entertaining and informative and confussing ones when I try to work out my options