In a recent report, Japanese investment bank Nomura said that the biggest life office beneficiary of the Retail Distribution Review (RDR) is likely to be Legal & General as providers move towards asset management from traditional insurance business.
In a research note, the analyst observed that the proposed change of remuneration against the advice given has already encouraged IFA’s to sell more asset management products compared to risk mitigation products.
Nomura says that L&G is a leader in products such as Unit Trust Trackers and ISAs – products supposed to grow as a consequence of RDR. The ‘losers’ due to RDR will be hybrid insurance products such as unit-linked life insurance items, where L&G has a modest presence, observes Nomura.
Nomura forecasts L&G’s segmental profits from asset management services to grow to 37 percent of total earnings by 2013 from the present 21 percent of total profits, largely assisted by “favourable industry changes” because of RDR.