Friends plans to go direct for simplified products
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Harvey: ’there are sectors where simplified is more appropriate’
Resolution is looking to introduce a direct simplified term insurance product through Friends Life.
In an interview with Money Marketing, Friends Provident managing director of UK individual business Graham Harvey says the direct route represents a bigger opportunity for simplified products than the adviser channel.
He says a simplified term product could work well within online comparison websites and the bancassurance and brandassurance markets. Harvey says: “In the IFA marketplace you see a more full-fat advice offering, where IFAs want to be able to make recommendations across the product range.
“But there are certain sectors of the market, such as the brandassurance market, where we already have relationships with the likes of Tesco, the AA and John Lewis, where I think a simplified proposition is more appropriate.”
Harvey says it is challenging to marry up the idea of a simplified product with whole of market advice.
He says: “We can see opportunities on the simplified side and more so with simplified non-advice but we will remain focused on the IFA marketplace as well.”
It is expected that the Resolution acquisitions of Friends Provident and Axa’s UK life bus- iness will come together under the umbrella brand of Friends Life this month.
Harvey says, under Friends Life, the core business areas will be corporate pensions and protection. A review is being carried out on the annuity business which is expected to conclude by the end of June.
Friends Life is set to pull back from the investment bond market, with the closure of Axa’s investment bond to new IFA business. The Friends Provident investment bond will stay open.
Harvey says: “We are much more focused on doing business with distributors where we feel we can earn adequate return rather than just going for volume.”
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Readers' comments (6)
Norm d'Plume | 10 Mar 2011 3:36 pm
Proof that IFAs aren't giving them enough business? If everyone received the service we've received from them since they demutualised I'm not surprised.
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Evan Owen | 10 Mar 2011 4:09 pm
Would you like a trust to go with that 'simplified product' sir? What type of trust would be appropriate in your cirumstances Miss Jones? Do you think life of another would be better for you Joe and Jenny Bloggs? Would single life be a more sensible option than joint life Mr Jones & Miss Smith.
What do you mean you wants some advice? I'm sorry but we don't 'do' advice, your will need to see an IFA, if you can find one.
Simplified my foot!!
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Sean | 10 Mar 2011 4:47 pm
What happens when the client wants advice on trusts?
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Anonymous | 10 Mar 2011 5:07 pm
Can anyone confirm my reading of this is correct.
The RDR was brought in to action to remove a potential bias which MAY have existed in independent advice processes?
The RDR reduces adviser numbers.
These adviser numbers will try and be replaced by a simplified advice process?
The simplified process will be tied?
Is a tie not the ultimate bias?
What is the detrimental cost to a client of tied process compared to an independent one?
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Bill Wells | 11 Mar 2011 9:55 am
Term assurance is already the simplest product in existence.
That's not the problem ! If consumers buy a simple product without advice then the retailer can wash their hands when the product or, more importantly, the way the product has been set up (joint names, without Trusts, LTA rather than FIB) is later shown to be inadequate.
And then there is the pricing issue - giving the banks the opportunity to return to the bad old days when they would sell a simple term assurance at 5 times the premium of the most competitive provider.
Thanks FSA for doing so much to help Joe Public !
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Joe Public | 11 Mar 2011 12:37 pm
IFA's complaining as usual from said Joe Public!
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