Friends Provident says taking over Sesame and Pantheon Financial marks the next phase in its acquisition of distribution companies.
Marketing and UK distribution managing director Simon Clamp says Friends started out buying small stakes but believes the time is right to take full control of distribution firms.
He says: “We have been buying stakes of under10 per cent for a while and recently moved to buying bigger stakes in distribution. The time was right to buy a controlling stake in a distributor and we have been concentrating on these two companies for a while.”
He believes this trend is becoming increasingly common, with Standard Life, Old Mutual, Aegon and Axa also buying distributors.
Industry analyst Ned Cazalet says it is a prudent move as the market is moving to an open architecture model where IFAs can choose to place all their business with one platform provider. Advisers owned by an insurer are likely to put their pension and investment business with that firm for ease of use if there is little to differentiate wraps.
Cazalet says: “This is not about buying Sesame, it is about getting access to a bunch of intermediaries and, given where they think the market will be five years from now, they think it is worthwhile to have advisers with them who will migrate to their platform.”