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Deals are already changing industry

Is this anarchy in the UK financial services industry?

Last week brought three major deals covering nearly 500 RIs. Aegon, after a slow start, has pulled level with Norwich Union, Friends Provident, Skandia and AMP with Widows just behind in the dash for distribution. It is hoping to own or part-own between 300 and 400 hundred RIs.

Millfield, flush with provider cash, wants another 15 IFA businesses. The Germans are coming with AWD, Europe&#39s third-biggest IFA group now the UK&#39s third-biggest IFA by turnover.

The first fund managers are considering a move while ZAN has gone into overdrive offering IFAs a massive percentage of turnover to convert.

But do these deals make sense? The intermediaries appear to be retaining control of their businesses while benefiting from substantial investments. For the providers, we remain unconvinced that these deals represent value for money for shareholders or policyholders.

But at least it is not an estate-agent-style fool&#39s gold rush. As for better than best, we understand why these companies might seek such a change but to grant a waiver at this stage would be tantamount to abolition, which must surely wait until all the other rules are finalised. We do not know how it will all pan out, nor do the parties to these deals, nor for that matter does the FSA.

Intermediary businesses will see more investment – a good thing – while the market is becoming a little more tied -a bad thing. As for whether it is anarchy, organised chaos, or the “perfection” of the free market, we shall have to wait and see. But one thing is clear – even before it is implemented, CP121 has changed everything.

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