National IFA Inter-Alliance has bought Prudential's direct salesforce and part of its customer base comprising 70,000 clients.
The move by Inter-Alliance to offer new roles to Pru consultants and managers foll-ows weeks of discussions after the decision to axe the salesforce of 1,400 on February 13.
Inter-Alliance estimates about 1,000 of the staff will accept the offer to join. The IFA says the cost of the deal with integration and training costs will be around £5m But sources within the Pru salesforce suggest up to 75 per cent of that number have already made their own arr-angements either to join bancassurers, set up on their own as IFAs or leave the industry.
Pru consultants and managers are to be made redundant before being offered opp- ortunities with Inter-Alliance, subject to selection criteria.
All the salesforce will still receive the severance packages they are entitled to under the terms and conditions of their employment.
The MSF trade union, which represents some of the Pru salesforce, says it welcomes the opportunity but is taking a cautious approach until it gets full details.
Inter-Alliance has 1,400 advisers and an estimated 1.5 per cent share of the advice market. It hopes to increase its share to 3 per cent with the acquisition and to 6 to 10 per cent in the long term.
Chief executive Stuart McGreevy says: “These are good quality people who are committed to a rigorous training process.”
Pru is giving some of remaining direct salesforce the opportunity to join a new financial face-to-face service which will have 200 advisers focusing on financial planning.
Critical-illness cover and permanent health insurance could find themselves in a regulatory black hole outside the remit of the FSA and the General Insurance Standards Council if current plans go ahead The Treasury is collating responses to its consultation paper on long-term care which includes an option for FSA regulation of all medical insurances but it has already signalled its preference to regulate LTC insurance only.
A Treasury spokeswoman says: “We do not intend to introduce statutory regulation of critical and permanent health insurance.”
The GISC will regulate private medical insurance and it is likely the FSA will regulate LTC, leaving other health insurance unregulated.
GISC head of communications Catherine Nicoll says: “I am very concerned if people are under the impression that we will be regulating critical-illness cover and permanent health insurance.”
Swiss Re technical manager Ron Wheatcroft says: “The Treasury has to be very clear in how it defines LTC to separate it from other products.”
The confusion has led some insurers to call for a separate definition of long-term care as it is currently classed as critical-illness insurance by the Insurance Companies Act.
l Umbrella group the Continuing Care Conference has launched a manifesto for LTC. It says regulation of ltc early in the next Parliament, free- ing restrictions on equity rel-ease and linking pensions to ltc would help older people.
CCC deputy chairman and Norwich Union LTC strategy manager Sandy Johnstone says: “Clarity is the central issue.We have been unimpressed by the Government's lack of urgency on long-term care.”