Nucleus urges IFAs to capitalise on 'fragile' life sector

Advisers are being encouraged to take advantage of an apparent "fragility" in the life sector.

David Ferguson, chief executive of wrap proposition Nucleus, says the recent value erosion within the life sector has resulted in a 'plethora' of opportunities for advisers to review the structure of what he calls "the IFA/provider value chain".

Ferguson argues whilst the life assurance sector could have been valued at close to £100bn a few years ago, it would more realistically be worth a quarter of this today, and says this reflects the weakness in the retail sector.

He points out the current economic climate means life assurers are under increasing pressure to scrutinise all expenditure, and predicts shareholders will question more and more when the 'cash strain' from these companies will end.

Ferguson is forecasting an era of 'exceptional change' as the professionalisation of the IFA market gathers momentum, which he suggests will lead to 'unprecedented' opportunities for the more enlightened adviser.

"If the IFA sector can focus on the bigger picture, it should ultimately emerge stronger from the current financial crisis," he says.

"I believe the sector could greatly profit from the current weakness in the life sector and be more in control of itself than has ever historically been the case."

Ferguson says IFAs are without a doubt, the only people suitably qualified to help rebuild people's finances in the long-term.

"The future of the industry will focus on the sustainability as well as the transparency and honesty of business models. If ever there was a time to triumph over adversity it is surely now," he says.