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Friends raises the stakes

Friends Provident’s swoop for Sesame and high-net-worth IFA Pantheon marks a huge change in strategy for the life office on distribution but its rationale is unclear. It had restricted itself to buying stakes in businesses, like many other insurers.

This is probably most reminiscent of Aegon’s creation of Origen and purchase of Positive Solutions but is not a carbon copy. First, Pantheon is an established high-net-worth operation. Sesame has ambitions to be all things to all members and users by offering network, multi-tie and directly regulated support services options.

It still has distribution clout but has been dogged by fears over liabilities and its ability to cope with complaints, caught between some rather stern rulings by the ombudsman, some members and former members who believe it did not defend cases robustly enough and the FSA has just stepped in and fined the firm.

Perhaps its was this climate that saw the Misys board opt for a deal rather than continue to back the MBO from Patrick Gale and his team in the hope of getting more money in the long term. The purchase of Pantheon however throws some light on just how much the old school network businesses and support services companies are worth.

The per RI comparison between the two businesses is staggering and this is with Patrick Gale having gone some way to modernise the network.

Industry analyst Ned Cazalet may be correct in the belief that both purchases are distribution plays giving Friends a serious leg up as its plays catch-up in the wrap market. Axa, for example, clearly has similar ambitions for Thinc. But it remains to be seen how much they can turn the deal to their advantage.

Does the fact that Sesame is at least partly a multi-tie mean its members can be directed in a certain direction and how much will Friends ultimately benefit? It still seems that the advisers’ businesses will have quite a lot to say if the business was taken in a direction they did not like.

With another life company in the arena, the dash for distribution may have some way to go before we know the winners.


The remains of the delay

Punitive tax charges may make many Sipp and SSAS holders rethink the delaying tactics which were intended to see their pension funds become estate planning vehicles, says IPS Pensions managing director Rupert Curtis.

FSA wraps up split-cap probe

The FSA has ended its five-year investigation into split-capital investment trusts after reaching a deal with four individuals that restricts their roles in the industry for various periods.BC Asset Management chief executive David Bruce has agreed to resign and give up his controlled functions except investment management and not to perform any significant influence functions […]

Swip picks Euro equity specialist

Kathleen Dickson is joining Scottish Widows Investment Partnership from Baillie Gifford in the newly created role of European equity product specialist. Dickson will work on developing Swip’s European equity and Reit funds.

Davy to meet the Queen

Ambassador of Huddersfield and SimplyBiz chairman Ken Davy will meet the Queen this week when she visits the town’s new Media Centre. Davy will explain the positive impact that the Galpharm Stadium and the partnership between the stadium, the town’s major sporting clubs and Kirklees Council have had on Huddersfield.

Sub-Saharan Africa Near-Term Outlook

By Paul Caruana-Galizia, Neptune Economist

Sub-Saharan Africa’s economic renaissance continues. After growing at an average rate of five per cent over the past decade, the IMF projects an acceleration to 5.5 per cent growth among Sub-Saharan economies in the next two years, as developed economies emerge from the crisis. We expect this growth to be sustainable for three broad reasons.


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