Sun Life Financial of Canada has become the latest player to axe its 1,700-strong direct salesforce just a week after the Pru cut 2,000 jobs at its direct sales arm.
The move, which has sparked fears that the days of direct salesforces are numbered, will see SLFoC closing its doors to new individual business at the end of February. But it will keep its group, fund management and banking businesses open.
SLFoC blames reducing margins and increased competition from bigger players for its decision.
The Pru looks set to increase its distribution through intermediaries with the creation of Scottish Amicable Financial Services, which combines ScotAm and Pru Intermediary salesforces.
Despite these massive cuts, other direct-sales providers have come out in support of their distribution channels.
Royal London, Pearl, Liverpool Victoria and Allied Dunbar have all confirmed their support of the direct face-to-face channel, with Dunbar saying its direct-sales network will be a powerful asset in the advent of multi-ties.
Royal London chief executive Mike Yardley says: “We believe that there is a place for the direct salesforce. We still have around 1,200 advisers visiting customers in their homes and they like that service.
“But customers are increasingly looking to contact us on the phone, through the post or over the internet. We are looking at how to develop these services.”
Allied Dunbar chief executive Keith Baldwin says: “Faceto-face advice is at the heart of our proposition. We are heavily investing in our advisers and the franchise.”
But Richard Jacobs Pension & Trustee Services director Richard Jacobs says: “It is not surprising these salesforces are disappearing. The heads of these companies are thinking about business and looking at their profits. The biggest costs come from direct sales.”