Royal London is closing its direct salesforce to focus on product manufacture, dist-ributing almost exclusively through IFAs.
The company says the expense that regulation puts on the sales process makes it uneconomic to carry on distributing its products through a face-to-face sales operation.
Group chief executive Mike Yardley says closure of the direct salesforce was inevitable, even if the 1 per cent price cap is raised by the Treasury next week. Direct sales rep-resented only 7 per cent of the group's new business in 2003.
The move will lead to 50 redundancies at Royal London's Wilmslow office and 330 jobs cuts around the rest of the country. No staff currently servicing IFAs will lose their jobs.
The face-to-face sales operation team had been contacting 55,000 customers a year. Premium collectors will continue to deal with over 800,000 customers.
Royal London will maintain a minimal internet and phone-direct channel but will now deal almost exclusively through intermediaries. Yardley says the company will focus on marketing its three brands – Scottish Life, Bright Grey and Royal London Asset Management.
He says Scottish Life International is working on a derivatives-based capital-protected product to target the part of the market recently served by with-profits.
Yardley says: “For Royal London, the economics of face-to-face advice through a direct salesforce just do not add up any longer. Our group strategy is to focus on the successful growth of our product manufacturing business, Scottish Life, Bright Grey and Royal London Asset Management, which distribute through intermediaries.
“The more we hear about depolarisation, the more we are sure that having specialist brands for protection, pensions and investment is the right way to go.”