Norwich Union today welcomed the FSA’s announcement that it is to proceed with changes to the polarisation regime, which ultimately have the potential to create a more efficient framework within which we can address the saving needs of the UK consumer.
Norwich Union today welcomed the FSA’s announcement that it is to proceed with changes to the polarisation regime, which ultimately have the potential to create a more efficient framework within which we can address the saving needs of the UK consumer.
Norwich Union shares the FSA’s main objectives of improving consumer awareness of the need to save, raising product quality and creating broader access to advice and product choice by stimulating greater competition and innovation among providers and distributors.
Within any competitive marketplace, participants will thrive if they produce products and services which consumers value. Product providers and intermediaries alike should seek to gain competitive advantage through the quality of their products and the strength of their brand, without the introduction of artificial constraints.
A positive outcome for policymakers, the industry and consumers has to include a vibrant IFA sector. Norwich Union therefore welcomes proposals to abolish the ‘better than best’ rules. The IFA market needs capital to drive distribution, innovation and technological efficiency. Both providers and intermediaries should, therefore, be free to enter into commercial relationships which make sound business sense and address the needs of their customers, whether this means dealing with the whole market, or with a limited number of providers.
However, we believe that investments made by product providers should be structured on an arm’s length, but supportive basis. All such investments must be fully transparent. Getting the right level of transparency will be vital to ensure consumers’ confidence. The FSA is right to look at developing rules that ensure that ‘independence’ is not prejudiced.
We are also pleased that the FSA is to develop the so- called ‘Menu’ option - devised by AIFA and IFAP in conjunction with a number of leading product providers including Norwich Union. This should provide a workable alternative to the Defined Payment System that would build on best practice within the IFA community, to make the cost and value of financial advice more visible to consumers at an early stage in the sales process.
Norwich Union already works with a variety of distributors and advisers and we are well placed to take advantage of the FSA’s proposed changes.
However, change will require carefully thought out regulation with appropriate transitional arrangements to ensure a robust market for advice is maintained which is accessible to all consumer groups.
Commenting, Peter Hales, Sales & Marketing Director for Norwich Union, said: "This is a major development for the industry and a significant opportunity for opening up the market for advice to more consumers. It also presents a real opportunity for IFAs to continue to develop and prosper. Norwich Union are delighted to have had an opportunity to have been actively involved in the consultation process, and we will continue to contribute positively as this progresses to the next stage."
Notes for editors
- Norwich Union is the UK’s largest insurer. It is the UK’s largest provider of life, pensions and investment products and one of the leading IFA providers. IFAs provide around 75% of the company’s long-term savings business.
- Norwich Union has strategic alliances with building societies and other leading UK brand names including Tesco Personal Finance and The Royal Bank of Scotland Group.
- Norwich Union’s news releases are available on the Aviva plc website at www.aviva.com
- A selection of images are available from the Norwich Union Newscast site at www.newscast.co.uk
Press office contacts:
James Evans, Norwich Union Life 08703 66 68 78
Out of hours 07790 487105
Ian Beggs, Norwich Union Life 08703 66 68 71
Out of hours 07790 487533
Louise Goffee, Norwich Union Life 08703 66 68 70
Out of hours 07810 057362