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Standard set to rethink strategy on stakeholder

Standard Life says it is not willing to shoulder the burden of offering unprofitable stakeholder busi-ness following Norwich Union&#39s decision not to operate actively in the individual market and Axa&#39s decision this week to target group schemes.

Standard&#39s announcement that it could cut commission on unprofitable individual plans would effectively withdraw it from the low-premium mar- ket as it principally deals with IFAs. It comes two weeks after NU said it would focus on lucrative big group schemes rather than low-premium individual schemes.

Axa has demonstrated its intention to focus on group stakeholder this week by launching a dedicated administration support unit. It admits the unit will not be operational for individual business for at least another year.

Standard Life marketing director Barry O&#39Dwyer says: “If companies like Norwich Union abandon the individual market, we might have to change our commission structure to avoid us getting more of the unprofitable business in the market.

“We have no plans to change our individual stakeholder commission at present. But our commission structure is constantly under review and there is downward pressure on commission because of the way the market is developing.”

Axa head of pensions marketing Steve Folkard says: “We undertook a detailed review of the market and it became clear that there is not an app-etite among most IFAs for operating within the 1 per cent charge. There are those who can operate within 1 per cent but it is more profitable for us to deal en masse.”

Wentworth Rose managing director Philip Rose says: “We have an industry that is strapped for cash and we are coming to a crunch point. This is a real political problem because the industry is effectively pulling out of the market. When were the life companies elected to look after the poorer sections of the British public at a loss?” A Department for Work and Pensions spokesman says: “Over a million stakeholder pensions have been sold and, with 50 providers on the market, we still feel that stakeholder is delivering good consumer choice.”


More Than links up with life broker

More Than, the direct-selling arm of Royal & Sun Alliance, is relaunching into life insurance using independent broker Direct Life & Pensions to search the market. Since R&SA closed to new life and pension business in August, More Than has not been able to sell life insurance. More Than customers will now be able to […]

CII misselling warning over exclusion of T&C

The FSA proposal to exclude training and competence requirements for non-advised mortgage sales could result in consumer confusion and misselling, says the Chartered Insurance Institute. The CII&#39s warning comes in its submission to the FSA&#39s consultation on CP146, which outlines its approach to the regulation of mortgage advice. Under the regulator&#39s proposals, the non-advised route […]

Gartmore picks product chief

Fund manager Gartmore has appointed David Middleton as head of commercial development. He is joining from Coutts Group, where he is commercial director and responsible for all product development with the private client bank. Middleton joins Gartmore in early 2003 and will take control of all product development.

Aberdeen protests to AITC over Godfrey&#39s comments

Aberdeen Asset Management has fired off letters to the Association of Invest-ment Trust Companies complaining about the evidence that director-general Daniel Godfrey gave to the Treasury select committee in July. It is understood that the company is unhappy at some of the comments made by Godfrey at the committee hearing into the splitcap debacle when […]

Creating opportunity out of change

By Denise Wond, marketing manager The buy-to-let market has recently been the subject of a raft of tax changes, all of which make it a less profitable and less appealing proposition for investors. In response, we’ve seen a dip in demand for BTL mortgages and that’s bad news for many advisers who will now be looking […]


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