Employee benefits consultants have vowed to fight attempts by insurers to bypass the advisory market in the corporate pensions sector, threatening to fight fire with fire.
Dick Strattan, head of employee benefits at Mercer, said certain pension providers had attempted to cut out the middle man by targeting employers directly.
“There is a definite trend among insurers that want to operate without employee benefit consultants there at all and just go direct to the customer. One of the biggest threats is they are going to go direct and cut us out,” Strattan said.
Strattan added that EBCs would resist the trend and planned to “fight fire with fire”.
Paul Goodwin, head of pensions marketing at Aviva, agreed some insurers were side stepping EBCs but maintained his firm still relied on advisers for business.
Goodwin said: “The EBC role is fundamental to us going forward.”
Similarly, Martin Palmer, head of corporate pensions marketing at Friends Provident, said his firm supported both EBCs and IFAs, and said he would continue to support both camps, particularly those experiencing upheaval as a result of regulatory change.
“We will work with advisers that are in transformation of their business models and help them to add value. We need to work together to make sure we end up getting the right customer outcome in the most profitable way,” Palmer said.
Faced with the threat of losing business in the corporate pensions market, one EBC, who asked not to be named, threatened to refuse to recommend offending insurers.
“Some firms might choose to ignore our services. Well we in turn might choose to ignore theirs,” the adviser warned. 5 How confident are you that personal accounts will become a reality in the way they are currently envisaged?