Life giant Prudential has decided not to invest millions of pounds developing a wrap platform because it believes in future the technology could be given away free, according to head of intermediated distribution Andy Curran.
It is one of the few life companies not active in the platform space as Aviva, AXA, Standard Life, Scottish Widows, Friends Provident, Legal & General, Aegon and Zurich all have, or are building, offerings in either the individual or corporate platform arena.
But Curran says he has not pushed Prudential into creating its own proposition because he is sceptical the multi-million pound investment will be easily recouped with so many providers offering similar technology.
"We have no intention of playing in the platform market. We see no requirement for, or benefit in, launching another 'me too' platform when the engagement between providers and IFAs is changing so rapidly."
He says platform providers may not be able to charge for services IFAs currently pay for in the future as a direct result of the RDR.
"Things like platforms or certain coaching or training for IFAs might very well be offered for free in the future as providers and IFAs change the way they engage with one another post-RDR. Then, how do you recoup your losses?
"As a manufacturer you have to spend a lot to build a wrap. But all technologies do similar things so then there are price pressures to compete, and where does that lead?"
How platform providers will charge for their services post-RDR is expected to form a major part of the FSA's Consultation paper which is due later this month.
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