Independent Financial Advisers – Why They Remain the Strongest Distribution Route for Pensions

Abstract

Despite financial services companies operating in multiple channels, the Independent Financial Advisers (IFAs) channel remains the most popular distribution route when it comes to pension sales. To understand how they compete and the nature of the strategic groups within this channel, this paper examines how IFAs perceive they add value to the decision making of consumers when purchasing pension products. The paper identifies four strategic groups of the IFA population (operating within the pensions market) based on the benefits they perceive they can add to their service to assist consumer decision making. Using cluster analysis within SPSS from a survey of 468 IFAs, four main groups emerge; these can be classified in terms of (1) analytical skills, (2) value for money, (3) reputation and (4) personalised service.

Acknowledgements

I would like to thank BGA Strategic Marketing (London) for their assistance with the data collection.