Interview - Mark Myers
The modest-sized British Friendly has giant plans for the IP market. Its CEO Mark Myers reveals all to Paul Robertson
In early March, Mark Myers, CEO of mutual society British Friendly, announced an income protection plan designed for the intermediary market and a managed roll-out to IFA networks.
True to his word, he has since announced partnerships with Positive Solutions and Personal Touch, and will shortly be working with LifeSearch.
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But a question that probably has been asked at the time was 'Why?' The society has been doing very nicely since 1902, and the financial advice market is facing turbulent times, the RDR and the advent of NEST. It is also ­struggling to fight off internet aggregators.
Myers is blunt on the subject. "In terms of what our ambitions are, that's the route you have to go IFAs selling protection.
It's the route you need in terms of making sure your customers get the right sort of advice.
"As a relatively small organisation, our opportunity to go directly to consumers with our brand is not there. We'd much rather focus on one group of people who we think we can service effectively."
sizing up for market growth
At present, British Friendly is solely an IP and Holloway product provider. But it has an ambition to increase its product range within narrow parameters.
"A common theme would be things that support our members at the time of greatest need. We're very keen to be in businesses which, when you come to work, you're proud to be in that business."
Myers will need expansion if the society is to become a player in the market. He notes that just more than 100,000 income protection policies were sold over the past year, and that only a percentage was in the society's target market of Class 3 and Class 4.
"We don't specifically exclude particular markets, but obviously quite a lot of that is at the top end of professional classes. So, we're probably looking at about 30,000 as a potential market."
Another fly in the ointment is that the investment side of a Holloway plan is still bothering the regulators.
While the FSA has come to terms with exempting them as an investment and therefore allowing commission to be paid on them, all is not settled.
"I'm not sure it's actually finally confirmed. This is an exemption from certain parts of the Retail Distribution Review, although I think there's still no confirmation of being exempted from the Packaged Retail Investment Products directive coming from Europe. And if that's not done, then the FSA view is pointless.
"Of course, the Treasury is involved in lobbying. But unless that exemption carries through to Europe, then it will be wiped out."
European legislators aside, the FSA has said there will be a Holloway exemption if the investment element is below a certain component, recently clarifying that amount as 20% or less.
Myers said the limit reflects the fact that these are not investment contracts.
"It is quite hard to argue for a very high investment element. At this level, it becomes what it really is a sickness contract, but one where you share in the surplus profits. I don't know why these products are not popular, except it's perhaps a slightly complicated concept to sell these days."
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