Standard Life is focusing on generating more ‘capital-lite' new business which does not require commission payments, chief executive Sandy Crombie told shareholders at the group's AGM today.
He said some products and distribution methods soak up much more capital than others, such as in commission payments. This can hold up the release of cash for dividend payments and other purposes.
“So our focus is on generating more new capital-lite business to enable us both to grow, and to release cash earlier. Our newer market-leading propositions, like SIPP and Wrap, were designed this way from scratch,” Crombie said.
He also told shareholders Standard Life had been successful in developing new distribution channels as it is unable to reach all the customers it used to through the usual channels.
Sales through non-traditional channels in the UK – including banks and consulting actuaries –have risen from 34% of the total sales in 2006 to 41% in 2007.
Commenting on the prospects for the group in the current climate, Crombie says: “Looking forward to the rest of 2008, none of us can see exactly what’s in store, but the signs are that it is going to be a difficult year for many.
However, our financial results for 2007 and our new business results for the first quarter of 2008, achieved in volatile global markets, show that we are in a strong position to manage these challenges.”IFAonline
What made financial headlines over the weekend?
Pensions neglect to be criminal offence
All-day event on 24 April
Consequences could be more severe than in stress tests
AFH has six segregated mandate funds