Advisers are actively acknowledging the importance of execution-only protection capability but are struggling to make viable propositions.
Adviser network Tenet reported that 30% of its firms are "seriously considering" execution-only but predicted only 5% would be able to build something meaningful in the next 12 months because of the inability to drive traffic.
Medium-sized advice firm Chadney Bulgin is launching online execution-only capability in the first quarter of this year but said driving traffic to the site would be "a real test".
Keith Richards, group distribution and development director at Tenet, said: "We have got a small number of firms that have developed this capability and we are using them as the benchmarks for what does and does not work."
Mark Robertson, protection partner at Chadney Bulgin, said advisers had to have online offerings now because of the fast-developing online space, but said the adviser would always be needed to push sales and explain beyond the price factor.
He said: "We have clients who are happy to do it themselves so we have incorporated that into our offering. It has very much been set up on the basis that the client can click a button to seek further advice from us. But how we drive traffic to this will be very difficult."
Robertson added that the firm had discussed the idea of partnering with an aggregator or comparison site to drive transaction-only traffic but had no plans to follow through.
Tenet has also engaged with comparison sites as an option but decided the process was more complex than initially perceived.
"There are too many people in the chain. And for the adviser if clients are directed to the comparison site the reward will be reduced as commission is shared and it can get difficult," he said.
Richards said protection was the starting point for the growth of transaction-only because it was more commoditised than investments and consumers could often recognise the risk to insure against without an adviser.
A handful of IFA firms recently announced partnership with life cover specialist aggregator Payingtoomuch.com in a bid to build viable non-advice arms to complement existing full advice propositions.
