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Thoresen urges move away from indemnity

Aegon UK chief executive Otto Thoresen is warning product providers are in danger of cannibalising each other’s businesses and says they need to move away from indemnity commission.

He says Aegon will continue paying indemnity to support advisers, particularly at a time when there is short-term need, but even advisers who rely on the cash understand it could be harming their long-term interests. He believes there is a need to decide on an end-game where commission is no longer the driver of relationships between clients, providers and IFA groups and their RIs so all businesses can be sustainable.

Thoresen is calling for a new alignment of interests to modernise financial distribution and he is asking like-minded industry figures such as Standard Life’s life and pensions chief executive Trevor Matthews to get involved.

He believes there must be a debate about the future of indemnity commission.

Thoresen says: “The point is, are you going to take a shortterm view, moving from crisis to crisis or not? We think there are enough people in the provider and adviser community who want to move to a sust- ainable position.

“What is happening in the world of providers is that no one is getting new customers because what you are doing is eating each other.

“We have a circulatory system which is unhealthy. But with a bit of luck, we can engage people like Trevor Matthews to take the debate forward. We have got to start to migrate to this end-game.”

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