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Corporate platform and RDR lead back to group sector

Friends Life says the launch of its corporate platform and the retail distribution review’s ban on up-front commission should reopen the group pension market for the firm.

In its half-year results, published this week, Friends says it expects strong growth in its corporate benefits proposition with its corporate platform launching later this year, supported by an unbundled investment proposition.

It suggests the removal of up-front commission will lead to more “rational competition” likely to reopen the group pensions market for the provider. Friends has been a vocal critic of the high levels of commission paid by rivals in the group market.

Friends believes the RDR should remove a major driver for advisers to rebroke business and help with customer retention.

The company says the “advice gap” likely to be caused by the RDR will expand opportunities for internal vesting propositions and for non-advised, simplified products.

Its half-year results show profits more than doubled to £390m from £151m in 2010 on an IFRS basis but on an MCEV basis profits were static at £180m.
The company has increased its dividend by 18.5 per cent to 6.47p.

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