Royal London boss alarmed by big insurers’ takeovers of IFAs

The scramble by insurance giants to hoover up financial planning firms threatens to drive up prices and give older customers a raw deal on their savings, the boss of Royal London has warned.

Phil Loney, head of the 155-year-old mutual insurer, said the recent push by FTSE 100 firms into the advice market was in the interests of shareholders, not savers.

He pointed to Standard Life, which has set up a company called 1825 to acquire scores of IFAs, as evidence the trend could weaken the amount of unrestricted advice on the table for savers by forcing them to recommend Standard Life products.

“We’re worried that what we’re starting to see is the end of impartial advice. These are all shareholder-owned companies and the pressure to improve margins will increase the cost of advice over time. There’s a danger consumers will not understand what they’re missing out. That is a concern,” he said.

Standard Life said its financial planners would be able to select outside of its advice panels to ensure it meets client’s requirements.

The raft of regulatory changes introduced by the Chancellor last year helped Royal London to a record quarter at the start of this year. New business written rose 52% to over £2 billion.