Single-tie operations will not die out with the onset of depolarisation, according to Axa Life head of distribution (building societies) Steve Jenkins.
Jenkins predicts that open architecture products will evolve, providing an element of choice to consumers but through the economies of a tied wrapper so the tied sector will not be as vulnerable as was first thought.
Speaking at the PIMS conference on board the Oriana last week, Jenkins told delegates that the tied model will be the only one able to receive benefit in kind after depolarisation.
He said the multi-tied model will be more likely to be restricted unless the benefit in kind can be demonstrably shown to be for the consumer's benefit.
Jenkins said that at the moment, the market is split into 69 per cent IFAs, who do around £7bn of business a year, and 31 per cent tied advisers, including bancassurers, who do around £3bn of business.
He predicts that with depolarisation, the market will become more evenly spread, with tied advisers still accounting for 31 per cent of business but IFAs losing ground to multi-tie operations and taking 29 per cent of the market, with multi-ties coming out on top with 40 per cent.
He said: “The vast maj-ority of multi-tie operations will be owned by distributors. I do not see many pro-viders running true multi-ties themselves.”
•PIMS, p8,12
Comments