LEBC is pursuing an aggressive acquisition strategy after a structural overhaul which sees the company split into four divisions.
The national IFA firm has previously been linked with a deal for Origen. However, LEBC chief executive Jack McVitie says the history and complexity of the firm caused him to back away from any potential merger. He says: “We are looking at a range of options at the moment.”
McVitie says LEBC will “learn the lessons” of previous failed consolidation projects by focusing on the culture of any firm it looks to acquire.
He says: “The most important thing in any acquisition is the culture of the company you are looking to integrate. If you try to merge with a business and there is no shared culture, you will end up destroying value.”
Last week, Money Marketing revealed that LEBC is splitting into four divisions – individual savings and investments, group savings and investments, group risk and longevity. The divisions will be headed by Kay Ingram, Glynn Jones, Lindsey Joseph and Nick Flynn respectively.
LEBC could look to extend its group risk division to incorporate individual risk business.
McVitie says the new structure will allow the company to focus on marketing new product solutions rather than sales and distribution.
He says: “The new structure lets us focus on what we are good at. One of the key aims is to try to make our business more marketing-focused than sales-focused. I think IFAs have traditionally thought of themselves as distributors of products but I am no more of a distributor for an insurance company than a doctor is a distributor of drugs.”
LEBC has already developed a longevity modelling tool which allows it to help defined- benefit schemes with big liabilities to understand the nature of their pension obligations. It is also preparing to roll out an automatic enrolment impact assessment tool for employers.
McVitie says: “We have been testing an auto-enrolment impact assessment tool with a couple of employers which we will look to launch pretty soon. I think companies are just starting to come to terms with what the pension reforms could mean for them and we think this could help with that planning process ahead of 2012.”
The group investment and savings and longevity divisions will target the defined-benefit pension market by offering advice to firms undertaking a pension increase exchange exercise.
In these exercises, pensioners are offered either a cash sum or a higher current pension in return for giving up future non-statutory pension increases. Schemes use them to reduce total DB liabilities.
McVitie says: “Lots of employers are either considering or are in the process of doing a pension increase exchange exercise. But The Pensions Regulator has said employees need to be offered advice if their employer wants to do it, so it is a fantastic opportunity for advisers.”
The individual life and savings division will also look to innovate, with the company hoping to develop a product aimed specifically at people aged 80 and over.
McVitie says: “I can see that it might look like discrimin- ation at first but there are significant issues that change in terms of advice for people who are 80 and over. We do not have anything specific yet but we are looking at a number of different solutions.”