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Model bid to break the vicious circle of distribution model

There is no quick fix to solve the problems of the current distribution model, according to Aegon UK chief executive Otto Thoresen.

Speaking at the Money Marketing Live roadshow in Manchester on Tuesday, Thoresen said that the regulator, customer, provider and adviser are stuck in a vicious circle which produces consumers who are not confident or demanding.

Thoresen said a number of business models are needed to tackle these issues, targeted at different customer types and he said they could be split by age or wealth.

If split by age, he said simple financial advice to younger people could be delivered through digital TVs, the internet or mobile phones and when they get older they would be moved on to a more complex advice model where IFAs would be key.

As part of these proposals, Aegon is to conduct a quarterly research survey with IFAs to seek their views on the provider-distribution model.

Thoresen said: “It is about ensuring the flow of customers continues to IFAs throughout their lives. If you start them young and allow them access to information through media such as the internet which they understand, then later they can be moved to another type of business model to suit their needs as they change.”

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