Scottish Friendly challenges adviser-led protection market
New link-up with D2C brand will not be popular with IFAs due to lack of front-load commission
Scottish Friendly has challenged conventional commission-loaded IFA protection pratices in its linking with a direct-to-consumer life insurance partner.
The friendly society has joined with Smart Insurance to sell life insurance, with premiums being based on a person’s age, rather than a single premium throughout life.
This means a 30-year-old will pay less than a 50-year-old, with it increasing over time, however, the method does not lead to front-loaded commission.
Neil Lovatt, sales and marketing director of Scottish Friendly, says, “This method doesn’t afford big commission upfront so it’s not popular with the IFA space.”
He adds that the deal looks to replicate the work Scottish Friendly did with the Nucleus platform in putting the distributor at the front of the proposition.
Lovatt agreed that it would be easy to mimic other providers model but added that it “did not want to run with the crowd”.
“There is greater value in working with a distributor taht is comfortable in the market and knows what they are doing,” he adds, stating that it also less risky and frought with difficulty than launching a new brand.