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Transact in full investment-linked protection launch

Transact in full investment-linked protection launch

Wrap platform Transact has launched the investment-linked life insurance policy it has been piloting since last November to the wider market, offering top-up protection to platform clients which automatically takes account of assets held.

The new term assurance product, Integrated Protection, was rolled out on a trial basis with 30 firms in November.

An online portal, developed by Integrated Protection Solutions Ltd (IPS), arranges the cover which is accessed via Transact. Ageas Protect is behind the insurance policy and can provide cover up to £5m, while Transact offers support with the use of trusts.

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Administration fees of £2 a month in addition to the policy premiums are charged by the platform, from which it states it does not take any profit.

Speaking to FTAdviser, Jonathan Gunby, chief development officer at Transact, said cover needed depends on the client’s portfolio value, so if the client wanted £1m in cover and had a £300,000 portfolio, they would just pay for the remainder.

The policy also automatically takes account of changes in value, meaning clients only pay for the level of cover they need.

Mr Gunby said: “You only pay for exactly the cover you need and the portfolio is recalculated every day. Generally advisers don’t get commission for this as our advisers are used to fees, but we can facilitate commission if they want to get paid like that.

“Advisers have to sign up to terms of business with Ageas to use it and we have 50 firms so far. It offers both a quick quote and a full quote - it used to be paper-based but it is now online.”

Transact is following on from other platforms which have rolled out protection offerings in the past couple of years, including Nucleus which completed its full rollout of Wealth Select following a pilot in early 2013, and True Potential which followed suit later that year.

Elsewhere, Mr Gunby stated that Transact is ready for the new pension freedoms following a “reasonable” investment to update technology.

He noted that aside from the technology side of thing, it has also been making sure people understand the changes between capped and FAD and how to explain that to consumers.

“We retrained 150 people client operations staff and all the sales team on capped drawdown, flexi-access, UFPLS, tax consequences etc.”

Last week, the Financial Conduct Authority published its rules for the ‘second line of defence’, which has fallen onto providers. As part of the rules providers will be forced to ask clients health questions and whether they understand the tax implications.

Mr Gunby said: “Second line of defence is much harder for non-advised, direct-to-consumers firms.

“They are now putting more onus on providers to make sure customers understand the tax implications, the products, etc. This is massive for D2C as they have thousands of customers who will want to talk to someone.”

donia.o’loughlin@ft.com