Norwich Union to outsource its wrap to Scottish Friendly
As part of its results, published today, the provider says it has entered into a strategic partnership with Scottish Friendly to migrate clients onto the society’s existing wrap platform and to run Lifetime’s back-office administration.
NU says the transfer is expected to complete by early 2009 at which point clients and advisers will see a significantly improved service.
According to the results, Lifetime cost the provider £23m for the six months to June 30, 2008.
Norwich Union Life chief executive Mark Hodges says: “This is a key partnership which forms part of our overall strategy to simplify operations, reduce costs and focus on new opportunities for growth.
“We will be making significant investments in our IT infrastructure over the course of the next three to five years to recognise the changing needs of the mass affluent customer who wants to do business with us online. This will focus on delivering more online solutions and product features.”
Lifetime managing director Toby Strauss says: “This agreement will give customers an improved service and will enable us to achieve greater flexibility and scale to meet the long-term needs of this market.”
“We understand that this decision causes uncertainty for our staff. However it is too early to give an indication of the likely number of redundancies. Our priority will be to keep employees fully informed throughout this process and we will do everything we can to minimise the impact of this decision. We have built up valuable experience and knowledge in this area and will seek to minimise any impact through natural turnover, not filling vacancies and redeployment where possible."
Financial Technology Research Centre director Ian McKenna says: "This is a sensible move to put an end to the uncertainty and allows NU to take a step back and see how the wrap market develops. Aviva is not short of money so I would not rule out a future acquisition of a wrap.
"The question for advisers will be whether NU will allow platform-to-platform transfers without a re-registration exit fee for those that do not want to migrate to Scottish Friendly. They will also want to know what scale of transfers out Scottish Friendly can cope with and on what timescale."