Insight
Title:
The mass market is underadvised
Description:
Post-RDR IFAs will be less likely to serve the mass market (ordinary people with average incomes and wealth) with advice as they can no-longer cross-subsidise these from their wealthier clients.
The banks have also historically been active here, but they are starting to withdraw from this sector in the face of increasing regulatory burden and costs.
-In 2011 Barclays stopped providing financial advice through its retail branches.
-In September 2012, Lloyds Banking Group made a similar announcement.
The 2014 budget, offering greater flexibility at retirement, will only serve to increase the need for advice. (Although the DWP has simultaneously tried to blur the line between advice and guidance.)
PESTEL:
Economic
Five Forces:
Bargaining power of suppliers