Julian Pruggmayer (FA, 23 July) implores all IFAs to put pen to paper and write to the prime minister about the impending threat to the IFA sector from the internet and auto-enrolment.
Unfortunately, Mr Pruggmayer misses the point. He points to how insurance brokers lost their car insurance market, but they lost their market because the market became commoditised and price-driven.
Much like local one-man-band opticians who have been squeezed out of the market by the big national chains of Specsavers and Boots; much like solicitors who have, largely speaking, lost the will-writing market and will probably lose the conveyancing market.
These are all price-driven commoditised markets. IFAs will gradually lose the protection market to the internet because it is price-driven and commoditised, so IFAs need to change the focus of their business from a price-driven transactional model to a relationship and service-driven added-value-based model.
This is the challenge for IFAs – not the threat of attack from the internet but making sure their business model is robust enough to survive. If they are successful in doing this then their offering cannot be commoditised and subject to attack.
Philip D. Stevenson
Chartered Financial Planner,
ARK Financial Planning,
Stalybridge,
Cheshire
