This is according to research by financial services technology solutions provider Avelo, carried out as part of the Avelo Experience Mortgage & Protection roadshows in February and March.
Despite this challenge, intermediaries appeared broadly bullish with 40% seeing no perceived threats on the horizon. However a further one in five (19%) intermediaries were concerned that a potential influx of advisers looking to add protection to their service proposition post-RDR might cannibalise their market.
Dave Miller, head of portal, Avelo commented: “Although protection was not an area directly affected by RDR, it’s interesting to see how changes in the regulatory environment coupled with demographic and technological shifts have had a knock on impact.
“So, while it is heartening that many of the advisers we questioned do not envisage any major threats to their business in this area, others are justifiably concerned about the increasing competition either from new market entrants or D2C propositions in what has traditionally not been a high growth market.
“Protection specialists can actually take some solace in the Government’s growing emphasis on bridging the protection gap, as evidenced in the recent Budget, and this should ultimately grow the protection market in the long-term.
“In fact, the market is already showing signs of growth this year, with volumes in the first quarter rising by 16% compared to the same period last year, which bodes well for the remainder of 2013.”