Commenting in the wake of Old Mutual Wealth’s purchase of advisory network Intrinsic, the managing partner of London-based financial services consultancy Harrison Spence Partnership, said: “The fear many traditional life companies have is losing distribution and haemorrhaging funds.”
He added that some of the largest providers in the market had insufficient distribution strategies, relying on costly advertising to promote products, while pouring money into developing investment platforms.
Mr Spence said that all these developments, on their own, would not be enough to protect their interests in the same way that maintaining control of a large distribution force could.
Earlier this year, Old Mutual announced it was purchasing Intrinsic. This came after other life and pensions companies such as Aegon UK and Lloyds Banking Group disposed of their stakes in Positive Solutions and St James’s Place respectively, while Friends Life put the Sesame Bankhall Group under review.
Mr Spence said: “That’s why I believe Old Mutual has been courageous in bucking the trend and buying a network outright. This is the most significant move in some time and it is definitely a shot across the bows for other firms, which do not have that distribution relationship.”
Mark Edley, director of West Yorkshire-based New Leaf Financial Services, said: “Having Old Mutual take over Intrinsic is comforting from an adviser’s point of view regarding increased security and is an attractive addition for Old Mutual itself.”