Protection advisers are concerned that Friends Life’s back book could be sold to a provider with poor levels of service.
Friends Life announced this morning that it is to split its operations between an open and closed book of business. The move will see four million of the provider’s customers move into the closed book.
Speaking to Money Marketing this morning, Friends Life chief executive Andy Briggs stressed that the decision was not driven by Resolution exit options and that the provider has “no plans” to sell off the closed life book.
But protection advisers have expressed fears that the split of business signals the sale of the closed book further down the line.
Closed life group Resolution was taken over in 2008 by Pearl Group, which rebranded as Phoenix Group in March 2010.
The Resolution brand was retained by founder Clive Cowdery and used to acquire Friends Provident, Axa’s UK life and pension business and Bupa.
Axxis Financial Planning director Owen Wintersgill says: “I hope the closed book is not put up for sale. There are companies out there which I dread taking over closed books because I know the service is awful. They milk the old client bank for every penny they can in exchange for an awful service. I hope it does not head in that direction.
“I would like to think that the Friends Life proposition is going to be different from the other predatory vulture fund takeovers we have seen before with closed books.”
Highclere Financial Services partner Alan Lakey says: “I would not be happy if Resolution sold off the back book as it could end up somewhere where it is viewed as purely an income-generating asset. One could see a continuing pattern with Resolution where if its business model is to operate the Friends Life business as a going concern, then maybe at some point it is going to jettison the old back book.”