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Life offices call for cash pool to support IFA firms

Clerical Medical and Aegon are calling on rival providers to look at clubbing together to provide cash injections to ensure the survival of IFA firms.

They believe IFAs are in urgent need of capital support and providers could set up holding companies to support firms, allowing them to remain independent businesses.

The move could be seen as a way of preventing IFA firms falling into the hands of rival companies in light of the recent acquisitions of Towry Law by AMP and Willis National by Bristol & West.

Aegon points to the experience in Australia where many IFAs are owned by product providers, saying this gives them the capital resources to operate on a renewal basis. It says despite their ownership, IFAs still operate independently.

Clerical head of strategic marketing David Shelton says: “IFAs have to resolve the issue of financing themselves. If there was an industry initiative around how providers could collectively identify how they could inject capital in to the IFA sector so they remained independent businesses, it would be a great idea.”

Aegon corporate development director Laurie Edmans says: “The presence of provider capital does not necessarily equal provider control. Companies could come together as a consortium and make the decision to back IFA companies.

“IFAs have definitely suffered from a shortage of capital. Life offices are in the main overcapitalised so why not invest some in the undercapitalised area of the industry?”

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