Nearly half of insurers are unhappy with their non-IFA distribution partnerships, casting a shadow over the launch of stakeholder, according to research by Watson Wyatt The research comes at a time when many leading life offices are looking to tie up with banks, building societies and affinity groups to sell their products.
The survey found insurance companies were disappointed by customer service and compliance levels as well as low-margin returns from selling their products through non-traditional channels.
It highlighted how insurance companies suffered operational and technical problems when adapting to the needs of individual distributors, including banks, building societies, employers and utility companies.
Watson Wyatt says that insurers are failing in their partnerships because they are taking an unfocused and unplanned approach to distribution instead of building specific solutions based on customers' needs to get the best results.
The results paint a bleak picture for the April launch of stakeholder.
Stakeholder pensions and Catmarked Isas can be be sold through a greater variety of distribution channels after changes made to polarisation rules.
LIA director of public affairs John Ellis says: “If insurers are unhappy with their distribution partnerships now, it will present us with a serious challenge to make a success of stakeholder.”
Aifa director general Paul Smee says: “We would expect there to be difficulties with technical products being sold by firms with little experience. IFAs are clearly exempt from such problems.”