Brokers show resilience ... and ignorance

Despite predictions by consultants, experts - and possibly even journalists - that high-street brokers faced certain extinction, various recent reports have shown a different outcome is now very likely.

And despite the internet, direct writers and retail brands having been around for some time, provincial brokers continued to grow market share in 2003, according to a report by Cornell Consulting.

While the closure of Hill House Hammond by Norwich Union threatened to revive scaremongers' arguments that the end is nigh, this, it has been proposed, is a line of argument best serving those most likely to benefit from it, according to Imas. In its report - Corporate Advisors' Annual Top 200 UK General and Life Distributors 2004 - it went a step further in likening the hype surrounding the regulatory deadline of 2005 to that of the Millennium Bug.

As some personal lines become less viable for brokers, corporate partnerships like banks and building societies are now starting to use brokers for affinity business, according to NU intermediary business director Ken Wallace (Interview, p20).

However, while ingenuity may win the day for some, others are showing less promise. Notably, in a survey by Grant Thornton of 160 brokers, 11% of those actually intended to continue trading without authorisation.

With regulation looming, brokers will need to demonstrate that they are credible, professional businesses first, and traders second, according to Kevin Young, chairman of the Argyll Group.

While opportunity clearly exists through innovation for some, others will continue to operate on a head-in-the-sand basis - and surely secure their demise by it. However, if the initiative is not taken, many may lose their status as independent intermediaries, and become nothing more than introducers to the massive carriers that have dominated since the enormous merger activity of the last decade.