Legal & General has agreed single-tie distribution deals covering 75 per cent of the UK building society sector as the provider develops its restricted advice offering ahead of the RDR.
L&G’s interim results for the first six months of 2012, published today, reveal IFRS pre-tax profits increased 11 per cent, from £471m in the first half last year to £525m in 2012.
The provider says building societies will play a central role in the provision of financial advice after the RDR.
It says: “We have secured distribution and customer access ahead of RDR during the first half of 2012.
“We have agreed a continuation and extension of our long standing relationship with Yorkshire Building Society (now including the Chelsea and Norwich & Peterborough building societies), together with further new relationships with Leeds Building Society and First Trust Bank of Northern Ireland.
“We now have sole tie distribution relationships with over 75 per cent of the UK building society sector in terms of customers, across over 1,100 branches.
“We believe that building societies are well placed for the efficient provision of financial advice following the implementation of RDR. Our expertise and services in fund assembly and panel construction are valued by these and other partners. We are confident that these services can be extended to a wider restricted advice market which is likely to grow post-RDR.”
L&G also expects the RDR to increase the demand for low cost, passive investment funds.
It says: “We believe that RDR will increase customer demand for low cost funds. We expect an increase in flows into retail passive funds, attracted by our low cost capability in passive management.”
Wingate Financial Planning director Alistair Cunningham says: “L&G have a mass market offering, so it makes sense for them to sell their products through banks and building societies.”