Life insurance group Skandia launched a stinging attack on its own industry yesterday, resigning its membership of the Association of British Insurers (ABI) and criticising its peers for supporting a new regulatory regime which it said would confuse consumers.
Skandia, which was bought by Old Mutual in 2006, sells its products via independent financial advisers in Britain and has been vocal in the redrawing of the financial advice regulations.
The ABI supported the introduction of an "assisted purchase" advice category, administered by lesser qualified sales staff. Skandia claims that such a plan would blur the distinction between sales and advice. As a result, it shocked the industry by resigning from the ABI and joining AIFA, the Association of Independent Financial Advisers.
Nick Poyntz-Wright, the chief executive of Skandia UK, said: "For some time now we have viewed ourselves as different from more traditional life insurers and have felt a lack of alignment with the broader membership of the ABI.
"We offer our investment solutions only through financial advisers because we believe passionately in the importance of quality advice to guide and support customers' financial decisions. Unfortunately fewer and fewer of our peers amongst the ABI membership share our focus on the advice sector.
"The ABI continues to do good work in improving corporate governance and lobbying for the fair tax treatment of UK savers, but our strategic direction has little in common with traditional with-profit providers or bancassurers – the time has come for us to step away."
The ABI insisted that its proposals for reform of the advice market would benefit consumers. "On the [Financial Services Authority's] Retail Distribution Review, we make no apologies for standing up for consumers," said the ABI director-general, Stephen Haddrill.
"Our members have consistently been in favour of increased professionalism and have advocated reform to eliminate commission bias and increase consumer trust in financial advice.
"Indeed, we share the AIFA and FSA view that it is beneficial to consumers if new sales models are developed. It is disappointing that Skandia do not wish to explore such new opportunities for consumers with us."Reuse content