Scottish Life says the recent rash of insurers buying up distribution is part of strategy aimed at creating a new breed of direct sales forces to try and dominate the advice market.
The provider says it is “quietly amused” by insurers who are buying up distribution and at the same time saying they are committed to the independent community.
It says it remains completely focused on independent, whole of market advice, will not sign multi-tie or single tie deals and has no plans to launch a direct sales force.
As part of its response to the Retail Distribution Review, Scottish Life has launched a website and published a report into the impacts of the proposals.
It warns that having no charge cap on primary advice products could lead to consumer detriment and suggests an intelligent cap that aligns costs with charges and changes through the lifetime of the policy.
The paper also highlights concerns about an “over-reliance on academic qualifications” although welcomes the increased focus on professionalism.
It suggests the advice market could be squeezed into an hourglass shape with the general financial adviser category looking unsustainable and unattractive resulting in a polarisation of the market between professional financial planner and primary advice.
It says it would not be surprised if the GFA category does not survive the consultation.
The provider says advisers should not dismiss out of hand the possibility of offering primary advice, either as an arm of their business or significant part of it.
Scot Life says in general it welcomes the RDR, particularly the debate it has triggered about the transparency of commission and the principle of customer agreed remuneration.
The paper says: “We are quietly amused by the insurers who are buying up distribution and yet stating they are committed to the independent community.
“We’re convinced they are positioning themselves for a new breed of DSF which they can dominate. There is no doubt that all this makes life tougher for mid-market IFAs, but the news need not be bad for those who wish to embrace change and greater professionalism and move towards PFP status.
“To be a top of the market professional adviser. or a quasi-DSF controlled by a big brand insurer- the choice is yours”.