View more on these topics

The end is nigh for group indemnity cash, says Lawson

Product providers are unlikely to be still paying up-front indemnity commission on group pension business by the end of the year, according to John Lawson.

Speaking at Financial Services Scotland in Glasgow last week, Standard Life head of pensions policy Lawson said advisers relying on this market are playing “a dangerous game”.

He said if one big provider pulled out, the market would quickly topple and no one would be interested in picking up the scraps of unprofitable business left over.

Lawson said Clerical Medical’s recent withdrawal from the market was not enough to make a big difference but emphasises the problems in the market.

He said standard group business can take as long as 22 years to break even or 40 years to make a decent return.

He said: “If one big provider comes out of this market, the whole thing will topple very quickly. Nobody wants to remain in it picking up the dregs of loss-making business. If this market is still around at the end of this year, I will be very, very surprised.”

Hornbuckle Mitchell director Neil Marsh said: “Clerical was a wake-up call. IFAs have to be very careful where they place business as providers move like a herd to pull out of unprofitable areas.”

See Conference Reports – Financial Services Scotland

‘Brokers must heed economic warning signs’
Cleary hits out at ‘dinosaurs’
FSA set to recruit providers as watchdogs
Independence of platforms is irrelevant, says Chamberlain
Clarification wanted on Sipps in limbo

Recommended

FTBs snapping up fixed-rate deals as rates rise

The fear of higher interest rates has led a record number of first-time buyers to opt for a fixed-rate loan, according to the Council of Mortgage Lenders. Data out today reveals that 85 per cent of first-time buyers chose a fixed-rate deal in January – the highest figure on record – and just over 70 […]

Seminars launched for IFAs and estate agents

Innovative Group Services and the Bespoke Hip Company are jointly launching a series of seminars specifically for estate agents and IFAs. The first seminar will be held on March 28 at the Crowne Plaza NEC, Birmingham and the second at Locktons, 6 Bevis Marks, London on April 26.The free seminars will include talks from leading […]

Purely launches online TV service through ITV

Purely Mortgages is to launch a TV mortgage facility through ITV’s regional broadband service.ITV Local Mortgages uses video to talk the customer through the issues affecting each main sector of the market and says it can take the customer rapidly from initial enquiry to completion.The mortgage brokerage service can be accessed through ITV Local, the […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com