Legal & General has ditched its exclusivity deal with Cofunds, which could pave the way for a launch of its own IFA platform.
L&G, which holds a 25 per cent stake in the fund platform, has maintained an exclusive distribution arrangement with Cofunds for its bond and pension wrappers since 2005.
But L&G executive director of savings Mark Gregory says the firm decided to terminate the agreement last month in an effort to improve choice ahead of the retail distribution review.
He says: “We recognise with the RDR that we need to have greater choice and greater flexibility, so I think it was sensible to break exclusivity with Cofunds.”
In an interview with Money Marketing in November, L&G managing director of platform and distribution Geoff Towers refused to rule out the possibility of L&G launching its own IFA platform.
Gregory says: “With regard to launching our own platform, things could change over time but, as things stand today, we are keen to continue working with Cofunds because it has scale and platforms are a classic scale play.
“But not every IFA is a Cofunds’ adopter. We are keen to talk to other platforms that fit into our target market about hosting our products.”
Evolve Financial Planning director James Norton says: “The decision to break exclusivity with Cofunds is good news. It will give people more choice in choosing these products and it makes a lot of sense in the context of the RDR.”
IFDS holds a 24 per cent stake in Cofunds, Threadneedle has a 20 per cent stake, Newhouse Capital Partners 18 per cent, Jupiter 10 per cent and Prudential 3 per cent.
Cofunds sales and marketing director Alastair Conway says: “It’s not a seismic change, it’s an evolution of our relationship. Both ourselves and L&G realised that the market will change and evolve as a result of RDR, and this will allow both parties greater flexibility.”