Fitch warns life cos: Don't rely on IFAs


Ratings agency Fitch has warned that life companies which rely on independent financial advisers (IFA) to distribute their products could be negatively affected by the retail distribution review (RDR), and predicted a bright future for bancassurance.

In a special report on the RDR, the agency said there would be no immediate impact on the insurers' ratings, but predicted distribution would shift from IFAs to "cheaper simplified advice, basic advice or no advice at all". Companies reliant on IFA distribution networks could eventually be negatively affected compared to those which are able to focus on platform or bancassurance, which would fare better. It also forecast a contraction in the IFA market, and consolidation among adviser firms, and said it expected some banks to invest more in their financial advice services. Here is ...

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