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&#39DPS will undermine independence&#39

Standard Life is focusing its response to CP121 with an attack on the defined-payment system and warning that undermining the IFA sector will not help consumers.

The company is also concerned that product providers may use equity investment in IFA firms as a means of influencing distribution to the detriment of consumers.

It says the DPS will cause IFAs to migrate away from independence as it is more expensive for product providers to distribute through them.

The life office says the DPS could also cause difficulties with VAT and with client-money-handling rules, which would require more onerous capital adequacy and accounting rules.

Standard is broadly in favour of multi-ties if it introduces more choice to the tied end of the market. It says consumer interests could be harmed if multi-tie distribution deals are based purely on commercial terms and lead to commission levels being driven up.

It also suggests the indirect benefit rules could be altered to allow technological assistance and says it would support an industrywide load scheme for IFAs on the Pass model.

Strategy and business development manager Janey Smith says: “We should be building on what IFAs have achieved rather than destroy it. There are a number of areas where IFAs have been very important, such as stimulating competition between providers. Depolarisation could potentially detract from some of the progress made in the last decade.”


Old Mutual fund moves sector

The Old Mutual Hallmark Growth Portfolio fund, previously known as the OM Gerrard Hallmark Growth Portfolio fund, is moving from the balanced managed to active managed sector to allow more investment in equities. The balanced managed sector only allows a maximum of 85 per cent equity exposure. The Gerrard Hallmark Growth and Gerrard Hallmark Income […]

Long-term protection

While incapacity benefit has been increased for the financial year 2002/03, the new rate for long-term incapacity set at £70.95 per week represents a meagre 17 per cent of the national average weekly wage of £418.This is one of many significant factors influencing attitudes towards state benefits. The Mintel Financial Intelligence report January 2002 shows […]

NU and Friends Prov take 20 per cent of Tenet Group

Norwich Union and FriendsProvident are each taking a 10 per cent equity stake in the Tenet Group. In the transaction, both life companies have each invested £9.5m made up of shares and loans in the group which owns networks M& E and Interdependence.

Friends Ivory & Sime snaps up R&SA&#39s fund manager

Friends Ivory & Sime has announced its intention to purchase the UK fund management arm of Royal & Sun Alliance for £240m.Under the terms of the contract, FIS will also manage R&SA&#39s life and general insurance funds exclusively for the next 10 years. The deal will see FIS&#39s funds under management increase to £70bn from […]

Life cover for life

Jennifer Gilchrist Proposition Lead – Design, Royal London When someone mentions whole of life plans, most people will think of a niche product that serves as an inheritance tax planning tool for high-net-worth clients. And it’s really not surprising they’ve been pigeonholed in that way because before the arrival of RDR in 2013, that’s more […]


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