Poor investment performance by life and pension providers is forcing them to shore up their market share by buying distribution through IFAs, according to Jupiter joint managing director Steve Glynn.
He says the market is resigned to the fact that depolarisation is likely to go ahead but fund firms are less likely to be affected by the shake-up than life offices, which are buying up or taking stakes in IFAs.
Speaking to Money Marketing following parent company Commerzbank's decision to take Jupiter off the market after months of seeking a buyer, Glynn says the German bank had clearly demonstrated its commitment to the UK market. He says the move to take Jupiter off the market is not a suspension of the sales process but a firm decision not to sell Jupiter and to use its UK strength to increase penetration of the European market.
Glynn believes one of the main reasons why there has been a spate of fund manager moves is that the pool of highly talented managers is too small and too many investment houses do not pay their managers enough.
He says: “Most of the market is resigned to the fact that depolarisation is likely to go ahead. The life and pension investment performance is not brilliant. That is why they are champing at the bit to buy up distribution and control their market share that way.”
But Aegon group public affairs manager Scott White says: “In terms of buying IFAs to control market share, it is simply not true. With the better than best rule, these firms will not be doing business with any Aegon UK companies. Even if that rule goes, the IFAs will remain completely autonomous.”