According to Money Marketing today ( 15^th May 2007), Sesame advisers are divided over the firm’s acquisition by Friends Provident with some fearing it will compromise their businesses and others believing it will not make a difference.

Friends Provident announced today that it is to acquire 100 per cent of Sesame from Misys for around �£75m and will take responsibility for all its liabilities.

Calculis director Alex Pegley is strongly against the move, saying it is totally wrong for product providers to buy networks.

He says: “I think there will be increasing incentives to become tied or multi-tied. As all the networks are hoovered up by the product providers I think autonomy will be lost.”

Dickson Lishman Prince partner Richard Lishman says it is a positive approach as there are a lot of insurance companies buying groups like Sesame.

“They are buying, in effect, a direct sales force but I hope they allow Sesame to remain independent.

“NatWest and the Royal Bank of Scotland are part of the same group but they tender for business against each other, so it can work.”

One IFA who does not want to be named thinks Friends Provident may be disappointed if they are expecting to gain a valuable distribution channel from this purchase.

He believes Sesame IFAs will be going out of their way to avoid any hint of bias towards Friends Provident in their client's minds and therefore the acquisition may actually reduce the amount of business they place with Friends Provident.

He says: “As of this morning, I have made a decision that I will not be using Friends Provident unless the product selected meets the old "better than best" criteria. I do not want the remotest hint of bias in my clients’ minds.”

James Trickett & Son partner Clive Balchin says he does not think the new ownership will make any difference to them, but that they also won’t tolerate pressure to sell Friends Provident products.

He says: “They’ve paid �£75m for it so there must be something of benefit to
Friends Provident.”

Virtue Financial principal John Blackwood says he hopes Friends Provident will improve Sesame’s ability to secure the best mortgage deals from the banks.

He says: “Sesame are a big company but they have not been successful in getting mortgage exclusive rates from the bank.

“Legal and General are very successful at getting exclusive rates and I hope Friends Provident can be as successful as Legal and General in that respect.

“Sesame are the largest network so they should be getting the best deals but that has not been the case.”

FSC Investment Services IFA Graham Tomlinson has had poor experiences with
Sesame in the past and hopes Friends Provident will improve their track record.

He says: “They promise a lot but deliver very little. Friends Provident will put some money into Sesame so hopefully they will improve the services.”

Sesame members should be aware that they have an anonymous “coffee point” with Panacea to discuss this, and a community to welcome them should they decide to “go direct”, and without any cost or retentions!

 

Source- Money Marketing 15 May 2007