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Role reversal for Friends merger

Friends Provident and Resolution have changed the terms of their proposed merger for a second time in a bid to prevent rivals scuppering the deal.

The agreed tie-up will now see Resolution as the offerer rather than Friends. This means Resolution just needs to achieve a straight majority of shareholders while Friends needs 75 per cent of its shareholders to approve the creation of Friends Financial. The commercial terms of the deal remain the same.

The move follows Pearl last week getting FSA clearance to acquire 20 per cent of Resolution. Pearl currently holds 16.5 per cent and, under the terms of the previous deal structure, would just have had to build a stake above 25 per cent to be able to block the merger. Pearl director Hugh Osmond could still launch a full cash bid for Resolution and speculation is mounting that he might look to tie-up with other insurers to try to broker a deal.

Meanwhile, Resolution is to acquire Scottish Provident’s broker consultant business from Abbey for Intermediaries. Resolution says the move for the business which has 65 staff will boost its distribution in the IFA market and help it to manage its costs. Resolution had been paying Abbey introducer fees after its acquisition of the Abbey Life businesses in September 2006.

Resolution head of UK new business Hugh McKee says: “We are delighted to have the distribution channel within Resolution. It is important to have an alignment between distribution channels, product development and marketing.”

Abbey spokesman David Stewart says: “This development gives Resolution an intermediary salesforce and will free Abbey to focus on the strong delivery of its core business of mortgages and general insurance.”


Lord Hunt to investigate the rise of claim-chasers

FOS review to look at allegations of unfairness and why complaints can’t be made by textThe review of the Financial Ombudsman Service will investigate why consumers use claim-chasing companies and pay a proportion of any compensation to them rather than going direct to the watchdog for free.Speaking to Money Marketing this week, the head of […]

‘UK facing protection crisis’

Consumer advocate Mick McAteer fears the UK could be thrust into a protection crisis on a similar scale to the pension crisis in three to four years.He claims the protection gap, estimated at £2.3trn by Swiss Re, could widen because the retail distribution review excludes the protection market.He says the FSA must proactively engineer a […]

Euro stars

Almost half the Adviser Fund Index panellists believe that continental Europe will be the best-performing equity region over the next year.Out of 16 respondents in last month’s survey, 43 per cent expect Europe to perform best. They say strength in the German economy, restructuring in France, enlargement of the EU and mergers and acquisitions have […]

Mott bolsters financials focus

PSigma income guru Bill Mott has raised the exposure to financials in his income fund to 35 per cent, claiming the sector now offers “outstandingly good value”.

Cricket - thumbnail

England vs Australia: pensions

Well, the cricket season is here, and England and Australia are stepping up to the wicket. Although we compete with each other in the sporting world, when it comes to pensions, Australia’s pension programme is held up as a model for our auto-enrolment initiative. Auto-enrolment was introduced because people weren’t saving enough into their pensions, and it is still early days but signs are positive. However, in Australia, saving into a pension is compulsory, and in fact employers are the ones who have to pay in. Employees in Australia can make additional contributions into their pensions, but they don’t have to. Should the onus be on the employer or employee to save? Well in the UK we think it’s both, but to get ‘adequate’ savings for retirement it’s the employee who has to pay more in.


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