Only one in 20 advisers considers supermarkets serious competitors in the individual protection space, despite their growing presence.
According to Aegon's seventh IFA Insights Survey, only six of 100 IFAs asked said they saw supermarkets as a business threat, instead pinpointing banks, building societies, internet sellers and comparison sites.
Other key findings include a continuing over-reliance on price or rate when recommending providers. More than eight in ten respondents named this among their top three factors.
Advisers' dismissal of the impact of supermarkets comes as more and more providers seek to utilise their big-brand presence to reach the mass market.
In April, Friends Provident announced a deal with retail giant Tesco to distribute protection products direct to the consumer (D2C).
It joined LV= (Boots), PruHealth (Boots) and Legal & General (Sainsbury's) in agreeing a distribution deal with a well-known high street brand.
"Individual protection should form the bedrock of financial advice," Aegon head of proposition for protection and investment Stephen Crosbie says.
"Seeing the potential in this market, more and more distributors are focusing their attention on protection.
"While this will undoubtedly be a good thing for people in the long-term, with more people purchasing some form of protection, it also presents a challenge from other distributors to financial advisers who have traditionally sold protection policies."
Elsewhere, 82% of advisers say they still consider price to be a vital factor in their recommendations to clients. However, other considerations, including underwriting capabilities and product terms and conditions, also proved popular.
The study also suggests 75% of advisers are either selling more protection policies this year compared to last, or a similar amount. Crosbie says: "During times of uncertainty the protection market remains resilient."
There was also good news for the business protection market. The importance of businesses protecting themselves against market downturns is becoming increasingly important, the study suggests. Almost three quarters (73%) of those questioned say the business protection space will either grow or stay the same over the next three years.
Current retailer/insurer D2C deals:
- Friends Provident - John Lewis
- Friends Provident - Tesco (in principle)
- LV= - Boots
- PruHealth - Boots
- Legal & General - Sainsbury's
HAVE YOUR SAY:
"The views are absolutely correct. No adviser has anything to fear from a supermarket - even Asda. The reasons are twofold - firstly, insurance generally has to be sold because consumers have proven unwilling to take those necessary steps to obtain the protection they need. Secondly, they don't know what they need and require guidance on the product choice, the provider, the term and whether it should be placed under trust. The reason advisers are better at this than supermarkets is partly because supermarkets (Asda excepted) do not give advice and also that they do not suggest answers to clients, they merely parade racks of leaflets and hope that shoppers will pick them up." Alan Lakey, Highclere Financial ServicesIFAonline
‘Important to have an anchor’
Report to be written by TPR
Lack of innovation for solutions
Some 2,000 consumers affected