Skandia is leaving the Association of British Insurers after a disagreement over the way financial products are sold.
The group, which distributes providers’ investment products through independent financial advisers, said it was different from “old style life and pension companies” and had “little alignment of interests” with the broader ABI membership.
It is instead reinforcing its support for the Association of Independent Financial Advisers.
The disagreement has its roots in the Financial Services Authority’s retail distribution review, which looked at the way financial products were sold.
In its response the ABI proposed introducing a third way of selling products, assisted purchase, under which consumers are not given financial advice, but are able to consult experts about the appropriateness of products for their needs.
But Skandia claimed the proposal blurred the distinction between sales and advice and would confuse consumers, adding the ABI’s own research showed 66 per cent of people who bought a product during an assisted purchase trial thought they had received advice. Instead it strongly supported the FSA’s proposal for a clear distinction between advice provided by a professional adviser on the client’s behalf, and sales made by a representative of the product provider.
Nick Poyntz-Wright, chief executive of Skandia UK, said: “For some time 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.”
He added the ABI continued to do good work in improving corporate governance and lobbying for the fair tax treatment of UK savers, but the time had come for the group to “step away”.
The ABI said it did not recognise Skandia’s description of its members.
Stephen Haddrill, director general of the ABI, said: “ABI membership is made up of a wide range of excellent financial services, asset management, advice and protection companies.”