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Zurich hedges its distribution bets

With many advisers and providers hesitating before making any call on depolarisation, Zurich has positioned itself across all distribution channels to hedge its bets.

Zurich is distributing its own-developed products through its Zurich Intermed-iary group wholesale channel which services banks, building societies, networks and other financial intermediaries.

Zurich also has a stake in adviser group Openwork but is looking to float it off within three to five years. Openwork operates a multi-tie model across several product areas but with a single-tied approach to protection, pensions, investment and annuities.

Openwork chief executive Stephen Leaman says advisers opting for a single-tie model across different product types can expect better remuneration rates from that provider and an easing of their admin burden. While they will have to justify this choice of provider to both the consumer and the FSA, it will also simplify training requirements.

He says adviser businesses need to focus on which segments of their business are most profitable before deciding which route to take and whether they can afford to offer both single and multi-tied options to their different client types. Leaman adds, although the June 1 deadline is looming, adviser reaction remains cautious.

He says: “Those networks which choose to link to many providers for products in a given market sector may not be able to negotiate such competitive rates and give themselves a greater administrative burden.This need is eradicated in models such as Open-work, where the consumer is aware from the start that, for example, a pension product will be provided by Scottish Equitable.”

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