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Cazalet tells industry to stand up and fight price caps

Life analyst Ned Cazalet has hit out at product providers for not standing up to Government ministers over price-capping and has described the £27bn savings gap as a “leap of fantasy”.

Cazalet, speaking at the Investment and Life Assurance Group annual dinner in London last week, said product providers had to tell the Government that price-capping was stopping them from making a profit.

He suggested that despite the fact that the Sandler products would do exactly what they said on the tin, no one would want to sell them to a bus driver and a bus driver would not buy them.

Cazalet was scathing about the cap and the savings gap, saying: “Why doesn&#39t somebody say to the minister we are commercial organisations? We have to make a commercial profit. I do not know what the trade bodies do. Why don&#39t they say we cannot put up with it? It does not help itself by going along with this nonsense. But it does not help going to the other extreme on £27bn for the savings gap.”

He said levels of discontinuance were running at 75 per cent of new business and last year&#39s £3.7bn spent on initial commission and £3.4bn in assimilating new business was unsustainable.

Rising volatility and falling returns made equity savings less appealing, said Cazalet, but, despite this, changing demographics still meant there were great opportunities for providers.


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