The FSA should forget its inquiry into aggregator sites
The real problem most people have with online price aggregator sites is that they didn’t think of the idea first. The FSA should forget its planned investigation into this sector as the market has already ruled on it and public take-up has been phenomenal.
So let’s not have another time-consuming and costly FSA investigation into these sites, resulting in the inevitable set of recommendations and consultations, and just accept the simple point that aggregators need to be policed in the same way that brokers are. The FSA’s remit here should be to simply create a level playing field in whatever way necessary.
Figures from research house Consumer Intelligence reveal that 80% of consumers who used price comparison sites in the past year would do so again, and for the 4,000 consumers interviewed, the number one determining factor that leaps out is – surprise, surprise – price.
The main issue of contention for brokers is, as ever, to determine how to react to both the price-driven consumer and the new landscape of price comparison sites. And whether they view the rapid growth of their online rivals as a threat or an opportunity?
Of course, people who use brokers are much more interested in obtaining a fuller service and other non price related factors. But the fear is that as the turf war with aggregators moves into the more complex commercial lines sector, cash-strapped small businesses could be lured away by promises of low prices, disregarding their need for the expertise brokers offer.
Perhaps what brokers and their representatives need to do is to launch a campaign to win the hearts and minds of their customers. For starters, they could devote their time and energy into hammering home the benefits of their expertise and service, and then work hard to provide transparency to the pitfalls and shortcomings of their bargain bucket alternatives.
And second, brokers need to embrace the technology used by aggregators – as some have started to do. It is no crime for brokers to have missed out in the first wave of this online revolution, but if they do not learn from it, it may well be.