So why is RDR so important to us?

At present, 97% or thereabouts of our new business comes from financial advisors. So if their business models are heavily impacted by RDR, then there’s a knock on impact to us.

The table below shows the the split of the distribution of our business in 2012. It clearly shows how important advisers are to us.

(Download XLS:) Download Excel



Bank and building society




GI broker




Legal & General Network




Our response to the challenge of RDR has been to try and seek out the opportunities presented by it, rather than merely seeking to comply with the new regulations.

So, at the core of our proposition going forwards is a very slick and efficient means of delivering compliant and high quality advice. We’ve linked together point of sale systems all the way through to our fund platform – our IPS platform. We believe it will be a market leading proposition.

What has been our response?

Our strategic response to RDR began in 2010. The programme has been working to provide all of our distribution channels with access to more transparent financial advice, charges and expectations of service for our customers. The programme has included a number of pieces of work:

  • we’ve removed commission on new business, and instead, our customers will pay for advice themselves – directly to the adviser or through us, as the product provider
  • there are changes to pre-RDR products (referred to as Legacy Products) as in certain circumstances commission will no longer be paid
  • we’ve developed RDR compliant products for each of our distribution channels
  • we've introduced a new point of sales (POS) system for banks and building societies and for Legal & General Financial Services, our own advisory service
  • we've developed a new universal charging system to enable adviser charges to be paid
  • we've updated our product literature and promotional materials
  • we've changed our terms of business and contracts with third parties, in particular intermediaries that sell our products and over 40 fund management groups
  • we've changed our processes and services to ensure they comply with RDR legislation and guidelines
  • we've made changes to systems (including portals) and processes to support the product changes
  • we've trained all of our own advisers to the required standard.

Strategic Partnerships

There are a number of pieces of the programme which we are particularly proud of delivering. The result of all this work was that on the 19 November 2012, we delivered our LGFS proposition. This was followed swiftly over the next two weeks by our IFA, Legal & General Network and Nationwide propositions. All before ‘R-Day’ on 31 December 2012.

Legal & General Network

We were keen to understand the adviser satisfaction with the Legal & General Network, which is where financial advisers sell our products and services to their customers. It looked at our relative strengths and weaknesses in terms of product and service delivery across the business. We wanted to use this information to provide a focus for action and improvement. The results showed that in 2012, for both sellers of financial advice and principals (the owners of the firms), their satisfaction with us has increased.

Satisfaction of sellers and principals [Sellers: Excellent 20%, Very good 30%, Good 34%, Fair 13%, Poor 4% = Note 3.5; Principals: Excellent 24%, Very good 42%, Good 27%, Fair 27%, Poor 6% = Note 3.9] (bar chart)


Finalising the Nationwide Building Society distribution agreement for Savings was a step that would set us apart in the market for financial services. The combination of our customer reach through our building society partnerships, now gives us access to:

  • over 85% of total UK building society assets (£271bn in 2012)
  • 83% of UK building society branches
  • 87% of investing members.

This brings us huge opportunities to help build scale in the UK and a real chance to build customer engagement and advocacy in the post-RDR world, both of which form part of our Group strategic objectives.


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