Initially, only a few key stores will have advisers licensed to sell financial products, although the number is likely to grow if the launch proves a success.
While M&S may train its own sales force, the administration side is likely to be carried out by another life insurance company, Equitable Life. Fund management will be contracted out. The sales force, probably about 50- strong at first, will be paid by salary alone and will receive no commission or bonuses.
The move follows extensive consumer research over two years, which showed that M&S's clients trust it to offer them financial services products. M&S believes its name can offset the public's widely-held distrust of insurance companies, reflected in a dramatic fall-off in product sales over the past year.
The industry's reaction is broadly favourable to the M&S launch. A spokesman at the Association of British Insurers, the companies' own trade body, said: "Insurers thrive on competition. This has always been the case and we have had new entrants coming into the market over the past few years.
"The thing M&S have got going for them is their user-friendly name. As far as we are concerned, anything which helps the public take more notice of life insurance or pensions issues must be welcomed."
M&S moved into financial services in 1984. It has more than 3 million charge-card holders, who account for 20 per cent of M&S sales. It is an authorised bank and began making personal loans in 1988. There are now 145,00 loan accounts with an average loan of £2,400. In 1993, financial services contributed £24m to the group's pre-tax profits.
The company already sells two unit trusts, launched in 1989, which can be placed in a tax-free personal equity plan wrapper. About 80,000 savers have more than £200m invested. Different parts of the portfolios are invested by separate fund managers, including BZW, Baillie Gifford and Robert Fleming.
However, perhaps because of their safety-first approach, the unit trusts have been marked by lacklustre performance.
Figures compiled by The Research Department, an independent analyst, show that both the M&S funds have barely beaten the averages in each of the sectors in which they operate since 1989. The M&S UK Select fund showed gains of 50.16 per cent in the five years to April this year. The company's Investment Portfolio fund rose by 50.73 per cent over the same period.