Advisory businesses are acknowledging the benefits of execution-only capability, but struggling to build viable propositions, according to one major adviser support group.
Network and national advisory group Tenet said almost a third of its firms are "seriously considering" execution-only, but it predicted just 5% would be able to build something meaningful in the next 12 months because of difficulties in driving traffic.
Keith Richards, the group's distribution and development director, said: "We have got a small number of firms that have developed this capability and we are using them as the benchmarks for what does and does not work."
Most businesses are looking to build a service initially for protection products, as they are deemed the most viable for execution-only propositions, Tenet said.
Fleet-based IFA, Chadney Bulgin, is launching an online execution-only service in the first quarter of this year, but said attracting customers to the site would be "a real test".
Mark Robertson, protection partner at the company, said it was important advisers developed simple offerings now because of the fast-developing online space, but said the adviser would always be needed to push sales and explain beyond the price factor.
He said: "We have clients who are happy to do it themselves so we have incorporated that into our offering. It has very much been set up on the basis that the client can click a button to seek further advice from us. But how we drive traffic to this will be very difficult."
Robertson added that the firm had discussed the idea of partnering with an aggregator or comparison site to drive transaction-only traffic, but had no plans to follow through.
Tenet has also engaged with comparison sites as an option but decided the process was more complex than initially perceived.
"There are too many people in the chain. And, for the adviser, if clients are directed to the comparison site, the reward will be reduced as commission is shared and it can get difficult," he said.
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