Channel Metrics: Consumer Distribution Trends in UK Financial Services - Overview Report- February 2010 Edition

• Publication date: February 2010

The Channel Metrics series is the most detailed and up-to-date guide to distribution trends in consumer financial services in the UK available on a published basis. It covers 28 separate retail financial products and services, giving it a unique level of detail and information on products that are ignored elsewhere. It analyses: how consumers acquire these products and services - e.g. online, telephone, post or in person; from whom they acquire t...

The Channel Metrics series is the most detailed and up-to-date guide to distribution trends in consumer financial services in the UK available on a published basis. It covers 28 separate retail financial products and services, giving it a unique level of detail and information on products that are ignored elsewhere. It analyses: how consumers acquire these products and services - e.g. online, telephone, post or in person; from whom they acquire them - e.g. direct from the provider, through intermediaries or affinity schemes; and how often they acquire them - i.e. how many consumers acquired a product in the last year, either for the first time or by switching provider instead of renewing or carrying on with an existing product. Findings from this survey are compared with those from 2005 and 2007 to show trends over time. Each of the 28 products is covered by its own briefing, while an overview report features them all plus additional, comparative analysis of distribution trends. Overall, the Channel Metrics series offers detailed and unique insights into trends in usage of distribution interfaces and channels across 28 distinct financial products and services - with a dedicated briefing having been produced for each - as follows: Car and home - motor insurance, breakdown recovery insurance, extended warranties (for cars), household insurance, home emergency insurance; life and health - life insurance, critical illness insurance, private medical insurance, dental insurance, health / hospital cash plans, personal accident insurance; banking products and associated insurance - mortgages, mortgage payment protection insurance, personal loans, loan payment protection insurance, car finance contracts, credit cards, prepaid cards, travel money; niche insurance - annual travel insurance, single trip travel insurance, pet insurance, mobile telephone insurance, extended warranties (for electronic appliances); savings and investments - interest-bearing savings deposits, cash ISAs, Child Trust Funds, personal / stakeholder pensions. Key questions addressed by the research include the following. How has the credit crisis affected sales and switching? Has it hurt some channels more than others? What is the ‘brand stretch’ of commercial partners? Which products can a supermarket sell? Can automotive associations such as the AA and RAC stretch from breakdown recovery to home emergency insurance? Does the Post Office brand and branch ‘footprint’ work for all products? Is the advance of online aggregators from general insurance into banking succeeding? Is customer loyalty increasing or decreasing? Is there a ‘ceiling’ to switching rates? What financial products are still sold face-to-face, and is this on the decline across the board? What is the impact of packaged bank accounts on the distribution of products bundled with them? What are the distribution trends for rarely researched products such as car finance contracts, Child Trust Funds, dental insurance, extended warranties, home emergency insurance and prepaid cards? Channel Metrics: Consumer Distribution Trends in UK Financial Services is based on the results of an online survey of c. 2,500 consumers arranged by Tpoll during November and December 2009.

Consumer Trends Industry in the United Kingdom

TABLE OF CONTENTS
0.0 EXECUTIVE SUMMARY ................... 1
Research background and structure ....... 2
Four of the financial products investigated are held by a majority of respondents ....... 2
High volumes of sales each year are driven by high levels of switching… ................... 2
… although switching rates have fallen for lending products amid the credit crisis ...... 3
Face-to-face distribution remains important for banking products and related insurance… ................ 3
… while the Internet is still increasing its share of motor and household insurance ..... 3
Though inbound telephone sales are in decline, outbound telephone sales are increasing their
share......... 4
Postal sales have dropped substantially - have they reached the bottom? .................. 4
Aggregators continue to grow general insurance sales, but have not broken through for banking ..... 4
Non-financial commercial partners have grown their share of sales, driven by specific products… ... 5
… but not-for-profit affinity partners have had little impact outside trade associations and unions ...... 5
Worksite distribution is strong for pensions and health-related insurance .................... 5
Banks and building societies have lost a significant share of sales both as direct providers… ........... 6
… and as distributors of other products, outside packaged accounts ... 6

1.0 INTRODUCTION ....... 7

Research rationale ........ 8
A number of motivating factors underpin the Channel Metrics report and series of briefings .............. 8
Updating the results from the 2005 and 2007 surveys ... 8
Analysis of consumers making an active distribution choice ................. 8
Analysis of consumers purchasing or taking out financial services in prior years ......... 8
Analysis of distribution interfaces ............. 8
Analysis of specific distribution channels. 9
Expanding upon the results from the 2005 and 2007 surveys ............... 9
Finaccord ...................... 11
Channel Metrics briefings ....................... 11
Other UK consumer research publications ................... 12
UK affinity and partnership marketing research publications ............... 13
UK small business financial services research publications ................ 13

2.0 CHANNEL COMPARISONS .......... 14

Introduction .................. 15
Overall customer take-up rates, 2009 ....................... 16
Four products are held by more than half of all respondents ............... 16
Available customer base, 2009 .......... 18
The largest markets are driven by high levels of switching, not by new customers… 18
… except for products with specific characteristics or high growth rates .................... 18
Trends in switching behaviour, 2005, 2007 and 2009 ..................... 21
Switching rates have fallen for lending products when compared to insurance and savings ............ 21
The credit crisis has reduced switching because lenders have ceased to chase new business… ... 21
… but given the chance, consumers are still becoming less loyal ....... 22
Distribution interfaces - 2009, 2007, 2005 and all previous years compared ..... 25
Overview ....................... 25
Internet and outbound telephone sales are the two growing distribution interfaces ... 25
CHANNEL METRICS: CONSUMER DISTRIBUTION TRENDS IN UK FINANCIAL SERVICES
Face-to-face environment ................... 27
Six products are taken out face-to-face by more than half of all customers ................ 27
Face-to-face distribution is becoming irrelevant for core general insurance products 27
Internet .. 29
Major insurance products and cards are taken out online by most consumers .......... 29
Personal accident and private medical insurance distribution go against this trend ... 29
Inbound telephone ....... 31
Inbound telephone sales have a growing role in specific niches ......... 31
Outbound telephone .... 33
Personal accident insurance is distributed by outbound calling ahead of other interfaces ................ 33
Outbound telephones sales are increasing their share of sales for 19 out of 28 products ................. 33
Post ........ 35
Will postal sales grow their share of sales in the future? ...................... 35
Distribution channels - 2009, 2007, 2005 and all previous years compared ...... 37
Overview ....................... 37
Distribution has shifted to online aggregators and non-financial commercial partners… ................... 37
… squeezing commission income for banks and building societies amid the credit crisis ................. 37
Direct sales ................... 39
Savings products are dominated by the direct channel, but this has weakened a little… .................. 39
… while direct providers are successfully fighting back for cards and travel products ....................... 39
Advisers, brokers and aggregators ... 41
Financial advisers, and loan, mortgage and insurance brokers ........... 41
Loan and mortgage brokers have increased their share of a shrinking market… ...... 41
... while financial advisers have lost ground for core life and pensions products… .... 41
... and general insurance brokers’ share of sales may have bottomed out ................. 41
Online aggregators ........ 43
Aggregators’ strength in core general insurance products has not extended to banking ................... 43
Not-for-profit affinity groups ............... 45
Automotive clubs ............ 45
Car clubs play a limited role even in automotive-related financial services................. 45
Charities . 47
Credit card sales by charities lag behind the frequency with which they offer them ... 47
Educational institutions ... 49
Growth in this channel comes from a very low point, and needs time to consolidate a customer base
................ 49
Professional and trade associations ...... 51
Pensions and health-related insurance are the leading products for this channel ...... 51
Trade unions .................. 53
Although active as affinity partners in many areas, the influence of trade unions is limited ............... 53
Financial partners ........ 55
Banks and building societies (acting as intermediaries) ....................... 55
The credit crisis has reduced the share of business held by banks and building societies ................ 55
Packaged accounts are responsible for their high share of sales in mobile telephone insurance ..... 55
Credit card companies (acting as intermediaries) ......... 57
Niche insurance products may offer a better opportunity than mainstream but commoditized lines . 57
Insurance companies (acting as intermediaries) .......... 59
Insurers up-sell from their core policies rather than cross-sell unrelated financial products ............. 59
Non-financial commercial partners ... 61
Automotive associations . 61
The brand strength of automotive associations has not extended to other financial services ........... 61
Car dealers and manufacturers ............. 63
Car finance contracts have been popular through this channel as other lenders have weakened… 63
… but three major car manufacturers have discontinued their co-branded credit cards .................... 63
Catalogue and other retailers ................. 65
CHANNEL METRICS: CONSUMER DISTRIBUTION TRENDS IN UK FINANCIAL SERVICES
The share of new customers of catalogue and other retailers is higher for prepaid cards than for
credit cards ..................... 65
Estate agents ................. 67
Mortgages are the key product for estate agents, supplemented by home insurance ....................... 67
Football and other sports clubs .............. 69
A wide range of financial products are offered by clubs, but uptake of them is low .... 69
Loyalty schemes ............ 71
Pet, accident and health insurance are the strongest areas for loyalty schemes ....... 71
Magazine, newspaper and other media entities ........... 73
A wide range of products are on offer, although only two have a significant share of sales .............. 73
The Post Office .............. 75
Travel-related products are the main areas of distribution strength of the Post Office ....................... 75
Supermarkets ................. 77
An increased emphasis on financial services has not led to a greater share of sales overall… ........ 77
… but prepaid cards and travel money are promising areas for development ........... 77
Utility (electricity, gas and water) companies ................ 79
Utilities are losing share of sales for home emergency insurance, their only significant product ....... 79
Sector-specific distribution channels...... 81
As distribution spreads across a multitude of channels, specialists are losing their share of sales ... 81
Travel agents and tour operators have made progress in selling annual travel insurance ................ 81
The worksite ................. 83
The worksite channel has increased its share of sales for core products since 2007 83
Employer funding is more common for pensions than for protection policies ............. 83

3.0 PRODUCT ANALYSIS .................... 86

Introduction .................. 87
Motor insurance ........... 89
Switching rates and brand new sales - 2009............ 89
Switching rates are stable but high for motor insurance ....................... 89
Distribution interfaces - 2009, 2007, 2005 and all previous buyers compared ... 90
Growth in online sales is slowing, as this interface reaches saturation point .............. 90
Distribution channels - 2009, 2007, 2005 and all previous buyers compared .... 92
Overview 92
Direct sales by insurance companies held their ground between 2007 and 2009 ..... 92
Detailed analysis ............ 94
Online aggregators have taken market share at the expense of all other major channels ................ 94
Data tables .................... 96
Breakdown recovery insurance ......... 98
Switching rates and brand new sales - 2009............ 98
The annual switching rate appears to be increasing for this form of insurance .......... 98
Distribution interfaces - 2009, 2007, 2005 and all previous buyers compared ... 99
The Internet is continuing to gain ground as a distribution interface .... 99
Distribution channels - 2009, 2007, 2005 and all previous buyers compared . 101
Overview ..................... 101
Direct sales by automotive associations constitute a shrinking market .................... 101
Detailed analysis ......... 103
Policies packaged or bundled on a wholesale basis account for a high proportion of this market . 103
Data tables ................. 105
Extended warranties for cars .......... 107
Switching rates and brand new sales - 2009......... 107
The switching market is nearing the same size as the new extended warranty market .................. 107
Distribution interfaces - 2009, 2007, 2005 and all previous buyers compared 108
Face-to-face sales remain the most important interface for extended warranties ... 108
CHANNEL METRICS: CONSUMER DISTRIBUTION TRENDS IN UK FINANCIAL SERVICES
Distribution channels - 2009, 2007, 2005 and all previous buyers compared . 110
Overview ..................... 110
Aggregators and brokers are winning market share from non-for-profit affinity groups .................. 110
Detailed analysis ......... 112
Car makers and online aggregators are the rising channels for extended warranties for cars ....... 112
Data tables ................. 114
Household insurance 116
Switching rates and brand new sales - 2009......... 116
An increase in switching has more than compensated for a drop in sales to new buyers .............. 116
Distribution interfaces - 2009, 2007, 2005 and all previous buyers compared 117
The Internet and outbound telephone sales are in the ascendant .... 117
Distribution channels - 2009, 2007, 2005 and all previous buyers compared . 119
Overview ..................... 119
Financial partners’ gains in household insurance were reversed between 2007 and 2009 ............ 119
Detailed analysis ......... 121
Online aggregators now hold over a third of sales to switchers and new buyers .... 121
Data tables ................. 123
Home emergency insurance ............ 125
Switching rates and brand new sales - 2009......... 125
The annual switching rate recorded for 2009 is almost identical to that for 2005 .... 125
Distribution interfaces - 2009, 2007, 2005 and all previous buyers compared 126
Patterns in interface usage are driven by different home emergency insurance formulae ............. 126
Distribution channels - 2009, 2007, 2005 and all previous buyers compared . 128
Overview ..................... 128
Most sales of home emergency insurance occur on an intermediated basis .......... 128
Detailed analysis ....... 130
The share of sales of electricity, gas and water companies is clearly under intense pressure ....... 130
Data tables ................. 132
Annual travel insurance ................... 134
Switching rates and brand new sales - 2009......... 134
Annual travel insurance is characterized by a high switching rate .... 134
Distribution interfaces - 2009, 2007, 2005 and all previous buyers compared 135
Online customers are more likely to switch policy than those using other interfaces ...................... 135
Distribution channels - 2009, 2007, 2005 and all previous buyers compared . 137
Overview ..................... 137
Packaging with added value bank accounts is a very significant feature of this market ................. 137
Detailed analysis ......... 139
The Post Office is one of the largest specific distributors of annual travel insurance ...................... 139
Data tables ................. 141
Single trip travel insurance .............. 143
Switching rates and brand new sales - 2009......... 143
Single trip travel insurance is characterized by an extremely high switching rate ... 143
Distribution interfaces - 2009, 2007, 2005 and all previous buyers compared 144
Close to three quarters of single trip travel policies are bought via the Internet… ... 144
Distribution channels - 2009, 2007, 2005 and all previous buyers compared . 146
Overview ..................... 146
… with online insurance aggregators and brokers accounting for a significant proportion of this .. 146
Detailed analysis ......... 148
Traditional affinity and corporate partners find the going tough in a fragmented market ................. 148
Data tables ................. 150
Pet insurance ............ 152
Switching rates and brand new sales - 2009......... 152
The annual switching rate in 2009 remained little changed from 2007 .................... 152
Distribution interfaces - 2009, 2007, 2005 and all previous buyers compared 153
CHANNEL METRICS: CONSUMER DISTRIBUTION TRENDS IN UK FINANCIAL SERVICES
The distribution share of postal sales has shrunk consistently over time ................. 153
Distribution channels - 2009, 2007, 2005 and all previous buyers compared . 155
Overview ..................... 155
The distribution share of insurance aggregators and brokers appears to have reached a plateau 155
Detailed analysis ......... 155
Distribution systems for pet insurance are becoming increasingly fragmented ....... 157
Data tables ................. 159
Mobile telephone insurance ............ 161
Switching rates and brand new sales - 2009......... 161
The annual switching rate recorded for 2009 is similar to that for both 2005 and 2007 .................. 161
Distribution interfaces - 2009, 2007, 2005 and all previous buyers compared 162
Patterns in interface usage are driven in part by a shift towards wholesale distribution.................. 162
Distribution channels - 2009, 2007, 2005 and all previous buyers compared . 164
Overview ..................... 164
Banks, through packaged accounts, and mobile retailers and operators dominate this market ..... 164
Detailed analysis ......... 166
Packaged policies are accounting for a progressively higher market share overall 166
Data tables ................. 168
Extended warranties for electrical and electronic appliances ... 170
Switching rates and brand new sales - 2009......... 170
Once bought, very few customers switch their warranty to an alternative provider . 170
Distribution interfaces - 2009, 2007 and all previous buyers compared .......... 171
Face-to-face sales remain the most important distribution interface in this market . 171
Distribution channels - 2009, 2007 and all previous buyers compared ........... 173
Overview ..................... 173
Channels other than manufacturers and retailers command only a limited share of this sector ..... 173
Detailed analysis ......... 175
Retailers appear to be outperforming manufacturers in this market . 175
Data tables ................. 176
Life insurance ............ 178
Switching rates and brand new sales - 2009 ............. 178
Fewer customers switch provider than take out a new life insurance policy ............ 178
Distribution interfaces - 2009, 2007, 2005 and all previous buyers compared 179
Face-to-face and inbound telephone sales have declined since 2007 ..................... 179
Distribution channels - 2009, 2007, 2005 and all previous buyers compared . 181
Overview ..................... 181
Distribution has moved from direct sales to a multitude of partners, especially commercial ones . 181
Detailed analysis ......... 183
Life insurance distribution has fragmented, with no single channel in the ascendant ..................... 183
Data tables ................. 185
Critical illness insurance .................. 187
Switching rates and brand new sales - 2009......... 187
One consumer in seven holds critical illness insurance .................... 187
Distribution interfaces - 2009, 2007, 2005 and all previous buyers compared 188
Distribution has migrated from face-to-face sales to outbound telephone sales ..... 188
Distribution channels - 2009, 2007, 2005 and all previous buyers compared . 190
Overview ..................... 190
Affinity and partnership channels have gained share substantially since 2007 ....... 190
Detailed analysis ......... 192
The complexity of critical illness insurance has limited the growth of aggregation .. 192
Data tables ................. 194
Private medical insurance ................ 196
Switching rates and brand new sales - 2009......... 196
A small increase in the annual switching rate was registered for 2009 .................... 196
CHANNEL METRICS: CONSUMER DISTRIBUTION TRENDS IN UK FINANCIAL SERVICES
Distribution interfaces - 2009, 2007, 2005 and all previous buyers compared 197
There is strong evidence for growth in inbound telephone sales of private medical insurance ...... 197
Distribution channels - 2009, 2007, 2005 and all previous buyers compared . 199
Overview ..................... 199
The results suggest that a higher share of sales than ever is being realised through the .....................
worksite… .................... 199
Detailed analysis ......... 201
… with other specific distribution channels related to employment also apparently faring well ...... 201
Funding methods for policies acquired through the worksite .. 203
In around a half of cases, employers fund the entire cost of private medical cover themselves .... 203
Data tables ................. 204
Dental insurance ....... 206
Switching rates and brand new sales - 2009......... 206
New or switching customers made up over one in five of all customers in 2009 ..... 206
Distribution interfaces - 2009 and all previous buyers compared .................... 207
Inbound and outbound telephone sales are moving up at the expense of face-to-face
transactions ................. 207
Distribution channels - 2009 and all previous buyers compared ...................... 209
Overview ..................... 209
Sales of dental insurance are split among a fairly broad range of partner types ..... 209
Detailed analysis ......... 211
The distribution share of dentists appears to be under pressure from competing channels ........... 211
Funding methods for policies acquired through the worksite .. 213
For worksite-distributed dental insurance, funding is mostly by the employees themselves .......... 213
Data tables ................. 214
Health and hospital cash plans ....... 216
Switching rates and brand new sales - 2009......... 216
Annual switching rates are comparatively low for customers with health or hospital cash plans.... 216
Distribution interfaces - 2009, 2007, 2005 and all previous buyers compared 217
Sales split on a comparatively even basis between the five competing distribution interfaces ....... 217
Distribution channels - 2009, 2007, 2005 and all previous buyers compared . 219
Overview ..................... 219
Worksite marketing and other partner channels squeeze the distribution share of direct sales ..... 219
Detailed analysis ......... 221
Various types of affinity and corporate partner are active as distributors in this market .................. 221
Funding methods for policies acquired through the worksite .. 223
Almost half of customers acquiring these policies through the worksite pay the full cost ......................
themselves .................. 223
Data tables ................. 224
Personal accident insurance ........... 226
Switching rates and brand new sales - 2009......... 226
The annual switching rate recorded a minor increase in 2009 ......... 226
Distribution interfaces - 2009, 2007, 2005 and all previous buyers compared 227
Outbound telephone sales of personal accident insurance are growing strongly .... 227
Distribution channels - 2009, 2007, 2005 and all previous buyers compared . 229
Overview ..................... 229
Excluding the worksite, sales are split quite evenly across the other five generic channels ........... 229
Detailed analysis ......... 231
Banks and building societies achieved a significant distribution share across all years surveyed . 231
Data tables ................. 233
Mortgages .................. 235
Switching rates and brand new sales - 2009......... 235
Both new mortgage lending and remortgaging have fallen sharply relative to 2005 and 2007 ...... 235
Distribution interfaces - 2009, 2007, 2005 and all previous buyers compared 236
CHANNEL METRICS: CONSUMER DISTRIBUTION TRENDS IN UK FINANCIAL SERVICES
The use of distribution interfaces by mortgage borrowers shows relatively little variation over time236
Distribution channels - 2009, 2007, 2005 and all previous buyers compared . 238
Overview ..................... 238
Prior to 2009, most mortgages were taken out directly from the ultimate lenders… ....................... 238
Detailed analysis ......... 240
… although the evidence of more recent years shows a clear shift towards mortgage brokers ..... 240
Data tables ................. 242
Mortgage payment protection insurance .............. 244
Switching rates and brand new sales - 2009......... 244
Both switching rates and sales to new customers were lower in 2009 than in 2007 ....................... 244
Distribution interfaces - 2009, 2007 and all previous buyers compared .......... 245
Face-to-face sales maintain their share, while remote sales slowly migrate to the Internet ............ 245
Distribution channels - 2009, 2007 and all previous buyers compared ........... 247
Overview ..................... 247
Distribution has become less concentrated, with traditional channels losing market share ............ 247
Detailed analysis ......... 249
Direct sales by insurers and online aggregators have made substantial gains in market share .... 249
Data tables ................. 251
Personal loans .......... 253
Switching rates and brand new sales - 2009......... 253
The general availability of personal loans has fallen sharply relative to 2005 and 2007 ................. 253
Distribution interfaces - 2009, 2007, 2005 and all previous buyers compared 254
Online loan sales lost ground to face-to-face distribution during 2009 ..................... 254
Distribution channels - 2009, 2007, 2005 and all previous buyers compared . 256
Overview ..................... 256
The distribution of personal loans is largely dominated by two generic channel categories… ....... 256
Detailed analysis ......... 258
… albeit a range of affinity and corporate partner channels also have some presence in this .............
market .. 258
Data tables ................. 260
Loan payment protection insurance ...................... 262
Switching rates and brand new sales - 2009......... 262
New sales of loan payment protection insurance have fallen dramatically .............. 262
Distribution interfaces - 2009, 2007 and all previous buyers compared .......... 263
The upselling rate for loans to loan payment protection insurance is only slightly higher face-to-face
............. 263
Distribution channels - 2009, 2007 and all previous buyers compared ........... 265
Overview ..................... 265
Banks and building societies have lost market share to all other channels ............. 265
Detailed analysis ......... 267
Online aggregators now hold over a third of sales to switchers and new buyers .... 267
Data tables ................. 269
Car finance contracts 271
Switching rates and brand new sales - 2009......... 271
New car finance contracts have fallen with the recession ................. 271
Distribution interfaces - 2009, 2007, 2005 and all previous buyers compared 272
Though face-to-face sales predominate, a substantial proportion of sales are made remotely ...... 272
Distribution channels - 2009, 2007, 2005 and all previous buyers compared . 274
Overview ..................... 274
Traditional distribution channels have increased their share of sales ....................... 274
Detailed analysis ......... 276
Car dealerships held a majority of this market in 2009 ...................... 276
Data tables ................. 278
Credit cards ............... 280
CHANNEL METRICS: CONSUMER DISTRIBUTION TRENDS IN UK FINANCIAL SERVICES
Switching rates and brand new sales - 2009......... 280
Switching rates have fallen as lenders changed strategy in the recession .............. 280
Distribution interfaces - 2009, 2007, 2005 and all previous buyers compared 281
Internet sales have levelled off, while the post is now the least important interface 281
Distribution channels - 2009, 2007, 2005 and all previous buyers compared . 283
Overview ..................... 283
Non-financial commercial partners are neck-and-neck with financial partners, for the first time .... 283
Detailed analysis ......... 285
Catalogue and other retailers distributed as many new cards as supermarkets in 2009 ................ 285
Data tables ................. 287
Prepaid cards ............ 289
Switching rates and brand new sales - 2009......... 289
New customers in 2009 outnumbered those holding a prepaid card taken out before that year.... 289
Distribution interfaces - 2009 and all previous years compared ....................... 290
The Internet accounts for a majority of sales, and has grown at the expense of inbound telesales ......
............. 290
Distribution channels - 2009 and all previous years compared 292
Overview ..................... 292
Direct sales accounted for nearly a half of cards acquired by switchers and new buyers in 2009 . 292
Detailed analysis ......... 294
Non-financial commercial partners are much more important distributors than online ..
aggregators ................. 294
Data tables ................. 296
Travel money ............. 298
Switching rates and brand new sales - 2009......... 298
Consumers display limited loyalty to travel money providers ............ 298
Distribution interfaces in 2009 ......... 299
Face-to-face transactions dominate the distribution of travel money ....................... 299
Distribution channels in 2009 .......... 301
Overview ..................... 301
Switchers and new buyers prefer foreign exchange companies to banks and building societies .. 301
Detailed analysis ......... 303
The Post Office is the single most important specific channel for travel money ...... 303
Data tables ................. 305
Interest-bearing savings deposits .. 307
Switching rates and brand new sales - 2009......... 307
Nearly a third of consumers with this product opened a savings account in 2009 .. 307
Distribution interfaces - 2009, 2007 and all previous buyers compared .......... 308
Banks and building societies have successfully pushed savings accounts away from the branch 308
Distribution channels - 2009, 2007 and all previous buyers compared ........... 310
Overview ..................... 310
Direct sales continue to be the most important channel for savings accounts ......... 310
Detailed analysis ......... 312
Financial advisers are holding their own against online aggregators ....................... 312
Data tables ................. 314
Cash ISAs .................. 316
Switching rates and brand new sales - 2009......... 316
Six out of ten customers who took out a new cash ISA in 2009 already held another cash ISA .... 316
Distribution interfaces - 2009, 2007, 2005 and all previous buyers compared 317
Online cash ISA sales are growing, but face-to-face distribution remains dominant ....................... 317
Distribution channels - 2009, 2007, 2005 and all previous buyers compared . 319
Overview ..................... 319
Direct sales held their market share in 2009, after losing ground between 2005 and 2007 ........... 319
Detailed analysis ......... 321
CHANNEL METRICS: CONSUMER DISTRIBUTION TRENDS IN UK FINANCIAL SERVICES
Financial advisers directed customers to cash ISAs in 2009 ............ 321
Data tables ................. 323
Child Trust Funds ...... 325
Switching rates and brand new sales - 2009......... 325
Six out of ten customers who took out a new fund in 2009 already held another Child Trust ...............
Fund..... 325
Distribution interfaces - 2009, 2007, 2005 and all previous buyers compared 326
Child Trust Fund sales shifted from the post to face-to-face distribution between 2007 and 2009 326
Distribution channels - 2009, 2007, 2005 and all previous buyers compared . 328
Overview ..................... 328
Two thirds of Child Trust Funds are sold directly by a variety of financial companies ..................... 328
Detailed analysis ......... 330
The Post Office has a larger market share for Child Trust Funds than for simpler savings ..................
products ....................... 330
Data tables ................. 332
Personal and stakeholder pensions ....................... 334
Switching rates and brand new sales - 2009......... 334
More than a quarter of respondents have a personal or stakeholder pension ......... 334
Distribution interfaces - 2009, 2007, 2005 and all previous buyers compared 335
Face-to-face distribution no longer accounts for the majority of pension sales ........ 335
Distribution channels - 2009, 2007, 2005 and all previous buyers compared . 337
Overview ..................... 337
Not-for-profit affinity groups recorded the largest gain in distribution share in 2009 337
Detailed analysis ......... 339
Aggregators are gaining share from financial advisers by policies, but perhaps not by premiums 339
Funding methods for pensions acquired through the worksite 341
The vast majority of pensions sold via the worksite are funded jointly by employer and ......................
employee..................... 341
Data tables ................. 342
4.0 APPENDIX ........... 344
Research sample and mechanics ... 345
Research m