Intermediaries Face a Big Challenge

Intermediaries have been extraordinarily successful capturing nearly 70% of the retail financial services market. But has this success been their undoing? Chris Cummings, Director General of the Association of Independent Financial Advisers and the Association of Mortgage Intermediaries believes that the Retail Distribution Review represents a ‘clear and present threat to the long term existence of the IFA community’. Lorna Bourke talks to him about the future for intermediaries.
What do you think marketing means to your members?
For the vast majority of our members, marketing is a posh word for sales. Looking at the membership base of both the trade bodies I represent, the vast majority are small firms. Good IFA firms find new clients simply by word of mouth recommendation whilst for mortgage intermediaries, with a buoyant mortgage market, the difficulty is keeping up with demand! The professional marketing community has work to do around marketing literacy – especially in getting the message across about what marketing can do for smaller firms. Most IFAs actually sit on top of a goldmine of existing clients. There is a big difference between how IFAs operate, compared with mortgage intermediaries where the relationship can be more transactional. The mortgage intermediary finds the best deal – the risk with this is that it can become a one-shot sale rather than being nurtured into a long term relationship. I think one of the interesting trends amongst our members is how they look at the client base as a source of ongoing business.
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