Liverpool Victoria has acquired a 4.99% share in the Lighthouse Group as part of a deal which will see the life insurer transfer its adviser base to the IFA and allow Lighthouse to provide advice to the insurer's affinity group members.
In a statement to the London Stock Exchange (LSE), the Lighthouse Group says the exclusive relationship deal will provide the firm with an opportunity to advise more than five million members of Liverpool Victoria's affinity groups, including Unison and the GMB.
Arrangements have been made to allow LV’s 42 whole-of-market face-to-face and eight telephone advisers, to start registration with Lighthouse immediately in order to achieve a “seamless handover of adviser and client relationships”.
As a result, LV will earn a share of commission from whole-of-market sales achieved by Lighthouse through the friendly society’s affinity group partners, while certain “recurring revenues” related to the LV whole-of-market division have been transferred to Lighthouse through a revenue sharing agreement, estimated to provide Lighthouse with over £1m in annual revenues.
The terms of the deal sees LV today take just shy of a 5% share in Lighthouse, worth around £918,000, while the insurer has the option of acquiring a further 5% of the group, for an additional estimated £1m, in order to “reinforce the strategic partnership and recognising the long term growth potential of Lighthouse”.
In addition, LV says it is also planning to restructure its tied advice operation to establish it as a stand-alone business, while the deal will also see Lighthouse admit LV= as a product provider onto its protection panel ‘Protection Step’.
Mike Newton, managing director of partnerships at LV, says offering life, pension and investment advice from the whole-of-market is an important part of the proposition it offers to its affinity group partners, so the deal means should lead to an improved service through a specialist IFA.
He says: “Taking a strategic equity stake in Lighthouse is a significant move, signalling the depth of the partnership and the importance to us of continued involvement in the whole of market advice service that our affinity group partners receive.”
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