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Cash is a sticking point for L&G on panels

Legal & General has attacked IFAs’ cash demands for making signing up multi-tie panels a “seriously sticky” process.

Finance director Andrew Palmer told MM sister title Finance Week that when negotiating multi-tie deals, the opening question from many adviser firms has been “how much are you prepared to pay us to be on our panel?”, leaving L&G forced to drop some deals.

It was concerns about such practices that led the FSA to send out “Dear CEO” letters last June warning product providers against paying inducements to secure intermediary distribution.

L&G says IFA demands have been less forceful since the FSA’s letter.

The company has signed multi-tie deals with Bankhall, Tenet Group and Thinc Destini along with single-ties with Bradford & Bingley and National Australia Group.

Palmer says: “The conversations that we have had with some of the panels have been seriously sticky. The opening conversation for many of them has been, how much are you prepared to pay us to be on our panel?”

Syndaxi Financial Planning managing director Robert Reid says he is amazed that life offices are surprised by advisers wanting cash to sign the provider to its panel.

Reid says: “Given the similarity in the services offered by insurance companies, what other criteria does he expect advisers to use? It is like going swimming and then being surprised you got wet.”

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