You got to have some sympathy with IFAs in their relationships with insurance companies certainly the long standing ones. The small insurers tend to be overwhelmed or swallowed up, the bigger ones go off to try and be global champions with varying degrees of success.
Prudential is already a global player. It has had to field a lot of questions about its UK commitment from analysts and from IFAs over the last few years, with a lot of its operations in Asia already.
But before this proposed deal, it usually had answers for them.
Shareholders have had a lot to be happy about. But IFAs also. It has been a success story for the past five years and perhaps more – the protection pipeline problems aside. It didn’t get caught up in the worst of any of the bear markets, it has had a go0d product set, it has been very well placed to take investment business off the back of many successful asset allocation decisions on the main fund and it has offered clever at and post retirement solutions too. It has boasted a successful joint venture for protection business. The stability in the UK anchored its steady expansion elsewhere but in many ways it seemed like a company with equilibrium, doing well on a lot of fronts.
The UK was not a cash cow to the extent of being stripped of investment, though talk of really big investments in UK distribution remained just that. That billion once talked of by a former chief doesn’t get mentioned much now.
This new deal must bring uncertainty. It is a huge undertaking which ranks as one of the biggest deals ever, with Pru becoming a huge financial giant. Despite assurances from its chief, the markets have reacted badly. IFAs may well feel the same, concerned that they and their clients will inevitably fall down the pecking order of priorities within such a huge concern. Some mergers work, some do not. It is often very difficult to see which are right and which are not until years after.
Even if it is successful there will be distractions. IFAs will want detailed reassurances and maybe even a little TLC if the biggest insurance firm in the world is to retain their business. For the moment though I bet most advisers are hoping that the dim view taken by markets scuppers the deal instead.
