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Axa Life Europe and MetLife stand behind “RDR ready” guarantees


Axa Life Europe, MetLife and Aegon say they are confident their different approaches to facilitating adviser charging on guaranteed products are RDR compliant.

This follows a letter from the FSA to Axa Life Europe in December backing its process of offering a guarantee on the investment sum minus the adviser charge, which has been widely circulated to advisers by Axa reps. Axa Life Europe, which is based in Ireland but writes business in the UK, asked the FSA in December for guidance on whether it can promote its variable annuity products as RDR ready for UK advisers.

The FSA’s response, dated 12 December and seen by Money Marketing, says where the guarantee is based on the total amount invested rather than the amount invested after adviser charges have been facilitated, this would make the guarantee worth more to customers facilitating higher adviser charges.

The letter says: “A more appropriate way to design the product in line with the spirit of the RDR would be to base the guarantee on the amount invested after adviser charges have been facilitated.”

Axa Life Europe says this letter confirms its approach is RDR compliant.

But MetLife, which offers guarantees based on the total amount invested, says it has had legal advice which confirms its approach is RDR compliant.

A MetLife spokesman says: “The FSA is aware of this advice and of the fact we continue to market our products.”

Aegon, which also offers guaranteed products, says that it offers guarantees based on the total amount invested minus any adviser charges, and believes this approach is RDR compliant.

Attain Wealth Management managing director Gordon Crothers says: “Logic would dictate the position as set out in the FSA letter would be the most sensible one.”


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