14
Feature Ia oFFshore lIFe oFFIce roundtable
Keeping upbeat in the gloom
At last month’s International Adviser roundtable, seven leading figures from the offshore
life industry met to discuss the issues their companies face, including the UK’s Retail
Distribution Review. The gathering found the industry was quietly confident for the future,
despite the economic climate and series of scandals that have rocked the financial world
“
Proposals
contained in the UK
Retail Distribution
Review continue
to be the subject
of much debate
and controversy
among advisers and
providers, with likely
requirements for far
greater transparency
in advice and product
costs a particularly
contentious issue
”
By Daniel JuDge
The international life insurance
industry is constantly
evolving and adapting to
changing market conditions,
regulatory developments
and challenges from
competing providers and
distributors of savings and
investment products, both
in the UK and overseas.
The global recession has
brought a new set of hurdles
for insurers to overcome,
with associated issues such
as the collapse of Icelandic
bank Kaupthing Singer &
Friedlander, fund blow ups
and frauds and widespread
investor caution creating
further dilemmas for the
industry.
Despite all this, providers
remain confident; in
the UK, the FSA’s Retail
Distribution Review (RDR)
is seen as a positive step
that will complement off-
shore insurers’ business
models, while the raising
of income tax and HMRC’s
new treatment of resident
non-domiciled individuals
may also prove boons to
the offshore bond industry.
In overseas markets, providers
are exploring new
opportunities and developing
product ideas tailored
to the economic climate.
With such issues in
mind, International Adviser
last month gathered senior
figures from the offshore
sector to debate the
state of the industry. In
the following pages we
cover the highlights of the
discussion.
l RDR
Proposals contained in
the UK Retail Distribution
Review (RDR) continue to
be the subject of much
debate and controversy
among advisers and providers,
with likely requirements
for far greater transparency
in advice and
product costs a particularly
contentious issue.
Richard Leeson, head
of business development
at Prudential International,
said: “One of the issues the
RDR is seeking to address
is transactional, high-commission
selling and commission
bias. We have
never had that in the offshore
arena. Most of what
we do is open architecture;
commission is generally
pretty low, so we have not
had to deal with the issues
that the UK market has had
to deal with.
“We are also dealing
with the top 25% of the
market generally in terms
of the quality of advisers
who are more tax-aware
and sophisticated, and their
clients tend to be more
sophisticated too. So we
are in pretty good shape
for the RDR.
“If anything, you might
get the second half or
quartile of advisers moving
up into the offshore space
as they move away from
transaction-based sales of
UK products.”
Alan Blackburn, head of
UK sales for Royal London
360º, added: “The offshore
industry is well placed
for the review because of
the way we offer different
charging structures, plus a
lot of us already provide
factory gate pricing on our
products.”
Peter Dodds, head
of marketing at Friends
Provident International,
explained: “The wider
definition of independent
contained in the RDR will
help [the offshore industry]
as well, because it
requires advisers to look at
INTERNATIONAL ADVISER [www.international-adviser.com] AuguST 2009
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