Prudential says multi-ties will get more commission, may have their FSCS levy paid and could get cheaper PI than independent advisers.
Outlining its vision of the depolarised world, Prudential told Money Marketing how it envisages entrepreneurial intermediaries operating joint whole-of-market and multi-tied businesses.
These advisers would be able to swap hats in mid-conversation with clients between offering a whole-of-market or multi-tied service. It is also thought that many firms could operate a simplified advice process as part of multi-ties.
Prudential became the first major player to commit to multi-ties with Millfield and Sesame last week and is aiming to raise £1bn through a rights issue to provide it with a depolarisation war chest and show its commitment to the UK retail market.
Business development director David Dalton-Brown thinks PI cover is likely to fall for multi-ties as they will be tapping into computer systems that will make their audit trail clear, cut down on paperwork and help keep them compliant.
He insisted that product providers will be looking at the best ways to add value to multi-ties by reducing some of their regulatory strains.
Dalton-Brown says: “Multi-ties will get more commission than an IFA. Obviously we are still looking at ways of adding value to the proposition. How that will be played out in different parts of the market is difficult to see.
“The FSCS levy, for instance. Maybe it will be that some players in the market are looking at paying this for multi-ties. And you will see other things added to the value chain. Effectively, what could happen is that an adviser could change hats mid-sentence. He could start off speaking as a multitie and finish with his whole-of-market hat on.”