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L&G predicts reduced adviser activity due to RDR transformation

Legal & General predicts reduced adviser activity for the rest of the year and into 2013 as advisers focus on RDR business transformation.

Speaking as part of L&G’s first quarter results, chief executive Tim Breedon says the provider will be focused on growing its workplace proposition and increasing its building society tie-ups. L&G already has partnerships with three of the four biggest societies.

The provider’s first quarter results show a 27 per cent year-on-year fall in new investment business, from 10.3bn to £7.6bn and a 6 per cent drop in new savings business, from £320m to £300m.

There was a 9 per cent increase in individual protection business, from £33m to £36m but a 20 per cent drop in group protection business, from £15m to £12m.

Individual annuities saw an 18 per cent increase, from £22m to £26m, while with-profits new business dropped 22 per cent, from £36m to £28m.

The firm predicts the start of auto-enrolment for large firms, from October, will increase schemes and assets under administration. It says it will have a potential auto-enrolment population of 415,000 members, compared to 350,000 for the 2011 financial year, in addition to existing scheme members secured.

Chief executive Tim Breedon says: “We anticipate preparation for RDR will reduce adviser activity for the rest of the year and the early part of 2013 due to the need for advisers to transform their client business models and processes.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Well I’ll go to the foot of our stairs !!!

    The thing I find bizarre is the fact that providers have only just worked it out – stand by for some mighty big u turns from providers when they look at their appalling balance sheets – shall we say mid to late 2013 ??? Lets not forget Mortgage Lenders either (as a result of regulatory meddling MMR)

    What goes round comes round only a matter of time before commercial considerations kick back at regulatory interference which is after all the biggest destroyer of free market economics and this industry. Its NOT mis-selling NOT a system thats broken, NOT mis-trust but meddling in free markets.

    A polite reminder to the exam/fee/wealth junkies – markets ALWAYS decide so if your business model is right ( and lets be honest its already available right now without RDR) then you will thrive and all clients with old school commission junkies will migrate to you – its just funny you have not already taken over the world – funny that !!

    Stand by for action about mid / late 2013 ??

  2. hear, hear, Derek sooner would be better though!

  3. Soren Lorenson 3rd May 2012 at 9:56 am

    Spot on Derek.

    You have to wonder about the quality of the management of life companies. They are paid a fortune to guide their companies to profitability but failed to understand the impact that RDR would have on their businesses and stand against it.

    Personally I’m glad I’m not running a life company. Life is going to get much much harder next year and profits will plummet.

    It will be too late by then to re-instate the comparatively low cost and (for the life companies) liability free sales channel they had through IFA’s.

    Imagine any other industry accepting that they would no longer be able to pay for product distribution.

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