Bypass life companies to offer protection value
Speaking at a Money Marketing round table, McKenna said there is an opportunity for platforms to launch protection products at lower cost if they bypass life offices. He said: "There is a strong argument in certain circles that most life companies offering protection products are really just badging up reinsurance. So, go straight to the reinsurer, you can cut out an awful lot of cost to consumer by putting it on the platform."
Nucleus chief executive David Ferguson said: "What do life companies really contribute? They contribute a distribution channel to a reinsurer. You can take 50 per cent of the cost of a protection product in the same way that you can take cost out of a Sipp product by having it on a platform."
But Skandia head of proposition marketing Peter Jordan questioned its potential of going direct and said: "If there is a huge opportunity to undercut, why haven't we seen it happen yet?"
Fidelity Fundsnetwork head David Dalton Brown said platforms' first priority would be introducing retirement inc- ome options but added: "At some stage, protection will be there and so will secured lending."