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L&G profits up as it highlights restricted advice muscle

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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 retail distribution review.

L&G’s interim results for the first six months of 2012, published this week, reveal IFRS pre-tax profits increased by 11 per cent, from £471m in the first half of 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 the 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 new relationships with Leeds Building Society and First Trust Bank of Northern Ireland.

“We now have sole tie distribution relationships with more than 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 the RDR.”

L&G says it expects the RDR to increase the demand for low-cost, passive investment funds.

Wingate Financial Planning director Alistair Cunningham says: “L&G has a mass-market offering so it makes sense for it to sell its products through building societies.”

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