Financial Advisors' Views of the Financial Crisis

Content

• Overview
• Catalyst
• Summary
  • Methodology
• Executive Summary
  • Advisors Are Predominantly Sole Independent Traders, With A Low Average Case Size
  • Advisors Are Uncertain About Their Business Outlook For The Coming Months
  • Providers' Financial Stability And Strength Of Service Prove To Be Important Factors For Ifas When Choosing To Whether To Continue Business With A Company
• Market Context
• Introduction To Datamonitor's Q4 2008 Financial Advisor Survey
  • Sole Traders Are The Predominant Ifa Type
  • The Ifa Industry Deals With Average Case Sizes Of Less Than 5,000
  • Advisors Have More Positive Views Towards Some Life Companies And Asset Managers Than Others
  • Ifas Continue To View Legal & Generall&g Very Positively As An Insurer
  • Abbey Maintains Its Low Position In Advisors' Attitudes Towards Life Companies
  • Scottish Life Is Favored Less As A Life Company, As Most Ifas Find Its Product Sets Do Not Match Their Business Models
  • Invesco Perpetual And Fidelity Received The Most Positive Response From Ifas
  • However, Hsbc Does Not Seem To Be Able To Offer Products To Match Ifas' Business Models
• Providers Can Support Advisors By Reducing Their Exposure To The Economic Downturn
  • Most Ifas Are Uncertain About Their Business Outlook For The Next 12 Months
  • Ifa Firms Expect To Downsize Or Exit The Market In The Following Months
  • Advisors Are Seeing Business From Both Existing And New Clients Damaged As Economic Conditions Worsen
  • Many Ifas Have Been Finding It Hard To Gain New Business In Certain Product Areas
  • Ifa Businesses Have Been Severely Affected By The Mortgage Market, Which Shows No Sign Of Stabilizing
  • Equity-Based Product Sales Will Decline During 2009
  • Pensions Products Are Proving To Be Less Difficult Sales For Ifas Than Other Products
  • Protection Sales Have Been Maintained As Their Importance Is Highlighted In The Current Economic Climate
  • Annuity And Income Drawdown Have Been The Least Affected Product Areas For Ifas During The Downturn
  • Financial Advisors Are Looking For Opportunities To Attract New Clients And Better Service Existing Ones
  • Providers Can Capitalize On Customers Who Are Seeking Greater Levels Of Guidance From Ifas
  • Providers' Attention Should Be On Product Innovations That Suit Changing Consumer Needs
  • Product Opportunities For 2009 Lie In Guiding Consumers Towards Term Assurance
  • Isas Are Also Likely To Increase Sales Over The Next 12 Months
  • However, Opportunities Still Exist For Other Product Areas, Such As Investment Bonds
• Stability Of A Provider's Buiness Will Maintain Ifa Confidence
  • Advisors Are Looking For Providers To Concentrate On Improving Their Financial Stability And Service In Order To Continue Business
  • It Is Important For Providers To Maintain Financial Stability If They Are To Sustain Ifa Confidence
  • Aspects Of Service Are Crucial In Advisors' Relationship With Providers
  • Ifas Consider A Provider's Reputation To Be A Vital Part Of The Business Relationship
  • Advisors View Some Life Companies As More Reputable And Financially Stable Than Others
  • Providers Are Perceived More Favorably When Their Corporate Performance Is Reviewed And Communicated Regularly To Clients
  • Ifas Perceive Friends Provident's Reputation And Financial Stability To Be Highly Damaged, But The Firm Has Come Through The Worst Of Its Dark Period
  • The Damage To Friends Provident's Reputation Is Mirrored By A Loss Of Confidence In Its Financial Stability
  • Prudential Seems To Have Maintained Ifas' Confidence Of Its Financial Stability
  • Hsbc Is Firmly Rooted At The Bottom Of The List Of Ifas' Views On Companies' Reputations, But It May Be The Best Capitalized Firm
  • Jupiter's Reputation Remains Unscathed In The Recent Economic Downturn
  • Credit Suisse Is Perceived By Many Ifas As Less Stable Than Its Peers
• Appendix
  • Data
  • Definitions
  • Single Premium Policy
  • Regular Premium
  • Wrap Accounts
  • Product Definitions
  • Life-Based Savings Products
  • Life Assurance
  • Single Premium Life
  • With-Profit Bond
  • Unit-Linked Bond
  • Income And Growth Bonds
  • Guaranteed Equity Bonds
  • Distribution Bonds
  • Purchased Life Annuities
  • Other Bonds
  • Isas
  • Matrix-Data Definitions
  • Ifa Firm Types
  • Further Reading
  • Ask The Analyst
  • Datamonitor Consulting
  • Disclaimer
• List Of Tables
  • Table 1: Ifas' Experience Of Business Levels Over The Past Six Months
  • Table 2: Sales Of Mortgage-Related Term Assurance By Distribution Channel, 2003-07, m Ape
  • Table 3: Areas Of Ifas' Businesses Affected By The Economic Downturn
  • Table 4: What Action Have You Taken To Reduce Your Exposure To The Economic Downturn?
  • Table 5: Advisors' Views Of Product Opportunities For 2009
  • Table 6: What Should Providers Do To Ensure You Continue To Do Business With Them Throughout The Downturn?
  • Table 7: Which Of The Following Best Describes Your Company?
  • Table 8: What Is The Average Case Size Of The Business You Deal With?
  • Table 9: Which Of The Following Statements Best Describes Your Current Attitudes To These Insurers?
  • Table 10: Life Companies' Product Sets Not Matching Ifas' Business Models
  • Table 11: Which Of The Following Statements Best Describes Your Current Attitude To These Mutual Fund Providers?
  • Table 12: Mutual Fund Providers' Product Sets Not Matching Ifas' Business Models
  • Table 13: How Have The Following Areas Of Your Business Been Impacted By The Economic Downturn?
  • Table 14: What Do You Expect To Happen To Your Business Over The Next 12 Months?
  • Table 15: In Terms Of Their Reputation, Which Of The Following Insurers Have Been Damaged By Recent Economic Events?
  • Table 16: In Terms Of Their Reputation, Which Of The Following Asset Managers Have Been Damaged By Recent Economic Events?
  • Table 17: Rank From 1-5 (1 Being Lowest And 5 Being Highest) Your Perception Of The Financial Stability Of Each Of The Following Insurers
  • Table 18: Rank From 1-5 (1 Being Lowest And 5 Being Highest) Your Perception Of The Financial Stability Of Each Of The Following Asset Managers
  • Table 19: How Have Your Customers Reacted To The Economic Downturn?
• List Of Figures
  • Figure 1: The Ifa Industry Is Characterized By Single Outlet Firms
  • Figure 2: Average Case Sizes Of Less Than 5,000 Dominate The Ifa Industry
  • Figure 3: L&g Is The Most Popular Life Company Among Ifas Surveyed
  • Figure 4: Many Ifas Find That Providers' Product Sets Do Not Match Their Business Models
  • Figure 5: Invesco Perpetual And Fidelity Rank Top Among Mutual Fund Providers
  • Figure 6: Advisors Find That Hsbc's Product Set Does Not Match Their Business Models
  • Figure 7: Advisors Are Confused As To Whether Their Business Will Improve Or Become Tougher In 2009
  • Figure 8: Advisors Have Experienced Declining Levels Of Business Due To Economic Conditions Over The Past Six Months
  • Figure 9: Mortgage Business For Ifas Have Suffered While At-Retirement Products Still Remain Stable
  • Figure 10: Ifas Are Attempting To Better Service Existing Customers And Actively Seeking New Clients
  • Figure 11: Customers Are Looking For A Greater Level Of Guidance From Ifas
  • Figure 12: Term Assurance Is Believed By Ifas To Be A Key Product Opportunity For 2009
  • Figure 13: Advisors Consider Financial Stability, Product Performance And Service Aspects Of Providers As Important Factors When Deciding Who To Continue Business With Throughout The Downturn
  • Figure 14: Friends Provident's Reputation Is Perceived By Ifas To Have Been Damaged In The Financial Crisis
  • Figure 15: The Majority Of Advisors View Also View Friends Provident As A Financially Unstable Life Company
  • Figure 16: Ifas Perceive Hsbc's Reputation As An Asset Manager To Have Declined Due To Economic Events
  • Figure 17: Credit Suisse Is Viewed As A Less Financially Stable Asset Manager