The Association of British Insurers has rejected the accusation that it is anti-advice and anti-IFA, claiming its members’ view the adviser channel as an essential part of future growth.
Speaking for the first time as the new chairman of the ABI, Archie Kane says he understands and sympathises with the concerns being expressed in the IFA community about the FSA’s retail distribution review.
But Kane says Aifa is wrong to accuse the ABI of adopting an anti-IFA stance in its approach to the RDR and suggests that most ABI members will continue to support and rely heavily on IFAs.
He says: “We would not agree with Aifa at all on that allegation. The IFA channel is still dominant in the UK and it would be inappropriate to say the ABI is anything other than interested and supportive in how the distribution channel develops. IFAs are important to us.”
He says advisers have proved in the past their ability to respond to change and develop new ways of meeting customer needs and will continue to do so after implementation of the RDR.
Kane says the review must create an operating model that works for consumers, distributors and manufacturers but the industry “cannot back away from the issues on the table”.
He says the ABI’s lobbying has to start with the fact that the members are commercial organisations looking to make a profit and it is important they can price a product and deliver it in a cost-effective way.
He says it is essential that the RDR produces an effective and efficient market for the industry while focusing on a target market that is not currently being serviced.
Kane says the RDR must not distort the market or make advice too expensive.
Responding to suggestions of a split in the ABI over some of the RDR plans, Kane says consensus is always an issue and while there is unity on goals such as professionalism, there is debate to be had on the “implementation and execution of these things”.
Kane believes primary advice will focus on needs such as basic protection and savings products and will not conflict with the pension personal accounts scheme that is striving to keep costs low for the public.
He says debate is needed over to the range of products that will be included within primary advice and whether it should include people’s borrowings as well as savings.
Pension reform is high on the list of Kane’s priorities in the run-up to the next Pensions Bill and with the appointment of a new Work and Pensions Secretary, pensions minister and Paul Myners recently taking the helm of the Personal Accounts Delivery Authority.
He says the ABI has proven very effective so far in its pension reform lobbying and will continue to work to ensure that the proposals do not distort the current market on issues such as Government subsidy.
Kane says regulation, customer confidence and climate change are the other priorities at the start of his two-year term as chairman and believes insurers can “hold their heads high” over the way they responded to the recent floods.