The chief executive of Family Investments, which announced an 83 per cent spike in profits in its recent financial results for 2013, said the firm would soon be expanding its children’s savings range and doing more to help the so-called ‘bank of mum and dad’ finance their children’s first home, car or wedding.
The mutual is also considering launching products in the equity release and care funding markets, Mr Markey said.
He also argued that the sector was now “ripe” for consolidation, claiming that the strongest mutuals will only survive if they can specialise in niche products that major banks cannot manufacture.
Mr Markey said: “Some 90 per cent of mutuals have accrued assets worth less than £1bn and arguably there are only 20 significant ones in the market.
“There is a trail of smaller outfits that have struggled to expand and only the fittest will thrive in years to come. We’ll be fit enough to take advantage of opportunities for consolidation.
“Mutuals have a major role to play in the provision of more niche products, as they are not obliged to generate returns on investments for shareholders. While they cannot compete on mass-market products, major banks cannot cater effectively to smaller corners of the market.”
Henry Knight, managing director of London-based Springtide Capital, has urged financial advisers to build closer relationships with mutuals, who he said can offer more tailored products for older clients than high-street banks.