Financial Advisors' views of Providers

Content

• OVERVIEW
  • Catalyst
  • Summary
  • Methodology
• EXECUTIVE SUMMARY
  • The UK financial advisory market is dominated by small independent businesses
  • Advisors view Skandia and Invesco Perpetual as offering best overall service
  • IFAs expect business practices with providers to change during a market downturn
  • Providers' strength of service is a key factor for IFAs to continue business relationships
  • Table of figures
  • Table of tables
• ADVISORS ARE UNCERTAIN ABOUT THE FUTURE OF THE COMPETITIVE MARKET
  • Introduction to Datamonitor's Q1 2009 Financial Advisor Survey
  • The financial advisory industry is dominated by small firms with a broad business base
  • Provider opportunities for 2009 lie in guiding consumers towards protection and pension products
  • Protection sales will be maintained as their importance is highlighted in the current economic climate
  • Pensions products will prove to be less difficult sales compared to other products
  • ISAs are likely to increase sales over the next 6 months
  • Advisors are most uncertain about the future sales of investment bonds
  • Advisors expect the market structure to consolidate
  • Banks will sell off their asset management and life operations as they focus on core competencies
  • Advisors are expecting to see providers diversify activities and minimize costs
  • Advisors are uncertain about how their dealings with a provider will be affected during a restructure
• ADVISORS BENCHMARK PROVIDERS
  • Advisors place business disparately with life companies compared to the more concentrated asset management market
  • More IFAs invest their life and pensions business with Scottish Equitable and Legal &General compared to others
  • Invesco Perpetual is more popular among advisors than other asset managers
  • HSBC receives the least business from advisors
  • Some large providers have stronger online penetration with IFAs than others
  • The life provider most preferred for online business is Abbey
  • Skandia has also achieved popular recognition among IFAs for online service performance
  • Advisors favor Fidelity's online services the most compared to other asset managers
  • Advisors are not keen to embrace technological advances
  • Value-focused concerns keep advisors skeptical regarding wrap propositions
  • The magnitude of picking the right wrap proposition delays uptake
  • IFAs face a challenge to improve their take-up of wrap platforms
  • Advisors perceive some life companies as offering best service than others
  • Skandia and Standard Life is viewed by advisors to offer better overall service
  • Skandia is seen as offering the best service among life companies
  • Standard Life offers customer-relevant solutions to address tough market conditions
  • Standard Life has the fastest speed of response to queries and quality of telephone service
  • Aviva is commended by advisors for the strength of their product range
  • Advisors rank the quality of Legal & General's products highly compared to others
  • Advisors rank Invesco Perpetual at top spot in all aspects of service but Fidelity is a close second
  • Invesco Perpetual's product range is renowned for their consistent performance
  • Fidelity also remains a popular provider among IFAs
  • IFAs are indifferent about providers' advertisement campaigns
• PROVDIERS CAN IMPROVE THE QUALITY OF SERVICE TO MAINTAIN CONFIDENCE AMONG ADVISORS
  • Emphasis on communication and service is the key method of differentiation for providers
  • Providers must maintain strong communications with advisors to continue business relationships
  • Advisors appreciate efficient and quality of communication from providers
  • Advisors want to work with knowledgeable domestic call centers
  • Advisors preferred method of communication for information on product launches is through email
• 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: How do you see business in each of the following areas changing over the next 6 months?
  • Table 2: Which of the following life companies do you conduct business with?
  • Table 3: Which of the following asset management companies do you conduct business with?
  • Table 4: What type of organization do you work for?
  • Table 5: Roughly what proportion ob your business is currently carried out in each of the following areas?
  • Table 6: What one thing should a provider make sure it is doing right in order to maintain a strong relationship with you?
  • Table 7: What one thing is sure to damage your relationship with a provider?
  • Table 8: Which of the following do you conduct business with? (Life companies)
  • Table 9: Which of the following companies do you conduct business with? (Asset management companies)
  • Table 10: In general, do you prefer to deal with each of the following online or offline?
  • Table 11: How do you rank the following companies in terms of their overall service?
  • Table 12: How do you rank the following companies in terms of their speed of response to queries?
  • Table 13: How do you rank the following companies in terms of quality of their telephone service?
  • Table 14: How do you rank the following insurers in terms of strength of their product range?
  • Table 15: How do you rank the following insurers in terms of the quality of their products?
  • Table 16: How do you rank the following companies in term of the effectiveness of their advertising campaigns?
• List of Figures
  • Figure 1: Sole traders are the predominant IFA type
  • Figure 2: IFA firms conduct business in several product areas
  • Figure 3: Advisors believe protection and pension business will see an increase over the next 6 months
  • Figure 4: Advisors expect banks to sell their asset management and life operations
  • Figure 5: Advisors are expecting to see providers diversify activities and minimize costs
  • Figure 6: Advisors are more likely to conduct business via telephone rather than online
  • Figure 7: Scottish Equitable and L&G are the most popular life companies among IFAs
  • Figure 8: Advisors conduct most business with asset management leader Invesco Perpetual
  • Figure 9: Abbey and Skandia have higher online penetration with IFAs over other life companies
  • Figure 10: Advisors deal online mostly with Fidelity and Invesco Perpetual than other asset managers
  • Figure 11: IFAs do not show an interest in support services using new technology
  • Figure 12: Financial advisors are most impressed by Skandia's and Standard Life's overall service
  • Figure 13: Standard Life ranks the highest in IFAs' perception of their speed of response to queries
  • Figure 14: Aviva is perceived by advisors to have a strong product range
  • Figure 15: Legal & General is viewed highly by advisors for the quality of their products
  • Figure 16: Invesco Perpetual is perceived as offering best overall service
  • Figure 17: Invesco Perpetual impresses advisors the most with the strength of their product range
  • Figure 18: Advisors perceive Invesco Perpetual as better quality products than other asset managers
  • Figure 19: Aviva comes top in advisors ranking of effectiveness of advertising campaigns
  • Figure 20: Advisors desire regular communication from providers in order to maintain a strong relationship
  • Figure 21: Advisors believe a good service offering is vital to maintain relationships with providers
  • Figure 22: Advisors want domestic call centers with knowledgeable operators
  • Figure 23: Advisors prefer online communication when being informed of new product launches