Legal & General chief executive David Prosser believes investment platforms are the way forward and will surpass multi-ties as the industry standard.
He says platforms and multi-ties effectively have similar aims but the former are a much more efficient solution for the adviser market, providing a more practical and lower-cost investment solution.
L&G has signed an agreement with fund supermarket Cofunds to provide life and pension wrappers for the platform from next year. The first products to be rolled out will include a life bond and a personal pension that will enable advisers to access portfolios from the providers signed up to the fund supermarket.
Prosser says: “Cofunds is very interesting and I think platforms are the way of the future, overtaking the multi-tie approach. Platforms enable advisers to maintain control with the customer and access more fund managers, providing a broader choice.
“Multi-ties are trying to do this in a less efficient way and platforms are the big development for the industry.”
Prosser says tying up with Cofunds also enables L&G to get in on the act without having to spend millions of pounds in the way Standard Life did when building its Sigma offering.
He says the first pension product offered through the tie-up will be a non-chargecapped personal pension. The branding of the pension is being finalised between the two groups and its success will determine whether group personal pension schemes and other more specialist contracts are offered through the platform.
Despite this, Prosser confirms that L&G has an ongoing commitment to providing stakeholder and is likely to launch a new product range when the charge cap is raised next April.
He says: “We intend to keep stakeholder available at 95 basis points through the internet. We will look at the new stakeholder proposals from competitors when they come out with them and if they are good we will copy them.”
He says the problem rem-ains how to reconcile the slender margins available on stakeholder with the cost of full advice. He adds that the internet is a low-cost direct-distribution channel well suited to stakeholder.
Prosser admits that cost pressures on life offices are set to intensify, with providers being required to overhaul back-office systems to deal with pension simplification.
He says: “The pension simplification systems involve developing new systems for new and previously written business and this will cost L&G tens of millions of pounds.”
Prosser declines to comment on L&G's ongoing appeal against a £1.1m fine for endowment misselling.
The Financial Services Skills Council is looking to develop a kitemark that will recognise providers that have achieved a high quality in their staff development.
Providers which pass the corporate training accreditation scheme will be able to display the logo in a bid to attract better talent.
The FSSC, which last week opened two branches in Scotland, has Government funding commitments of just over £5m for three years and is then expected to become self-funding. This will be achieved by undertaking research projects for both Government and industry and membership fees.
Speaking at the Skills Council's Edinburgh launch, chairman David Prosser said its main remit is to focus on ensuring the sector has a competent workforce.
Scottish minister of life-long learning Jim Wallace says this is particularly important to Scotland as its GDP is more reliant on the financial sector than in England. He has established a working group in the Scottish Executive looking to stop the migration of jobs to countries with lower labour costs.
Prosser, who is chief executive at Legal & General, says: “There has been a lot of debate about outsourcing to low labour cost countries but I believe we can compete in the UK through use of technology and skills.”