Royal London gives “broad welcome” to proposals from Retail Distribution Review
Wednesday, 27 June 2007
Commenting on the Discussion Paper issued today by the Financial Services Authority, John Deane, Chief Executive of Royal London's Intermediary Division, said:
"Royal London has been very supportive of both the objectives of the Review and the process it has used. We especially welcome the significant involvement of industry representatives, from providers like ourselves and from intermediary firms, as well as consumer representatives.
"The Discussion Paper contains a wide range of ideas and proposals. We look forward to contributing fully to the ongoing development of the current proposals into a final version which will be capable of delivering the desired outcomes in the marketplace.
"We have considerable practical experience to offer in this respect, notably in relation to Customer Agreed Remuneration (CAR). Scottish Life, the pension specialist arm of the Royal London Group, has been successfully operating on this basis (which we describe as 'Financial Adviser's Fee') for a number of years. Our experience has been that, after some initial hesitation, the proposition has been well supported particularly in the individual pensions market, with around 80 per cent of our new business now being transacted on this basis. Most importantly, we are confident that the quality and profitability of the business being written has improved.
"We also believe that CAR ensures there is much greater clarity for the customer around the services that are being offered and paid for. This clarity is in stark contrast to some of the recent pricing which we are seeing in the corporate market, where proposals are being put forward by some providers which increase the annual management charge for an individual member if they leave the scheme.
"We will be working through all the detail of the Discussion Paper in the coming weeks and will no doubt have further comment to make as our analysis develops. We will, of course, be providing our formal response in due course."
- ENDS -
For further information please contact:
Royal London
Alasdair Buchanan, Group Head of Communications
0131 456 7133
Polhill Communications
John Coles
07836 273 660
Editor's Notes:
Royal London Group, is a specialist financial service provider. Its businesses focus on those sectors of the market which value premium propositions, operating through a number of brands:
- Scottish Life – UK pensions market
- Bright Grey – UK protection market
- Scottish Life International – offshore investment markets
- RLAM – fund management
- RLAS – life and pensions administration
Royal London is one of the stronger life and pension companies in the UK, and has a particularly strong track record for with-profits performance.
Royal London is the largest mutual life and pensions company in the UK with Group funds under management of £31.5 billion. Group businesses serve over three million customers and employ 2,610 people (figures quoted are as at 31 March 2007).