Amazon to break into the ISA market?
Remember when Amazon was a book shop? That sold books? Now, of course, it sells everything under the sun, and why wouldn’t it- with a reputation for good prices and great customer service why not expand your ranges to other products.
Now, however, industry experts are suggesting that bigger, trusted retailers like Amazon and John Lewis might be eyeing up the potentially lucrative returns to be found in offering financial services products like ISAs.
Jeremy Oakley, from KPMG, told the Telegraph:
"The retail investment industry has had a good run for a long time," he said. "It has performed well from a business point of view, with good margins. But that world is going. And what will change things in the long run is consumer behaviour.
"People are experiencing fantastic levels of service in the retail world from companies such as Amazon and John Lewis. Finance and retail are not on different planets. What happens when retailers enter the financial services market? In my opinion, it's a question of 'when', not 'if'."
Interesting. So would you be interested in downloading an ISA along with the latest ebooks? The entry of such massive new players could mean that an Amazon ISA becomes the latest bestseller. Of course, some respected non-financial firms, such as Virgin, M&S and Tesco, have already dipped their toes into the financial services water, but a company like Amazon, given its size, happy customer base and reputation could actually move quickly into the market- and possibly even engineer better returns for consumers, with lower-performing funds and fund shops dropping out of the market in the face of Amazonian might.
Oakley said that the existing asset management giants, as well as the scarily profitable "fund shops" that distribute their products, are looking at ways in which they can adapt to survive in a changing market, particularly since new regulation has tightened the way they do business leading to more and more competitive fees for consumers willing to shop around.
But whatever happens, and whoever jumps into the market, Oakley thinks "customers will benefit, with better prices and a better product."
Roll on the Kindle ISA.