In a note to investors Investec described the RDR as ‘the most significant change the life industry has ever seen’.
It said the two companies best positioned to cope with the regulatory changes were SJP which it said ‘uniquely’ had ‘an internal sales force’ and Standard Life which had formally ceased paying commission since 2006.
Investec also backed Aviva to enjoy a good 2013 due to the arrival of new chief executive Mark Wilson on 1 January and the restructuring plans begun by chairman John McFarlane during his time as interim boss following the departure of Andrew Moss last year.
L&G might struggle as the RDR was predicted to have a bigger impact at the ‘everyman’ end of the market, the note said.
SJP was backed to be a winner.
The note said: ‘On balance, the upheaval in the UK life industry that the RDR is likely to induce should largely bypass the company.’
‘The focus on a mass affluent customer base should significantly insulate the company from the difficult economy while having an in-house sales force should mean minimal RDR disruption.'
Standard was also tipped to succeed due to the fact that in 2006 ‘it adapted its product offerings to a capital-light and commission-free model’.
Its focus on higher-net-worth clients was also predicted to help as ‘this part of the market is likely to be financially more resilient than the mainstream’ and is not well served by other major UK life assurers.
Investec said overall the RDR was good news for life companies in the medium term, but might not be in the short term, as providers have been geared towards selling new business and could face cost overrun for the next two years.
It said new business volumes were likely to decline, but that the end of commission payments and an assumed decline in policy churning would lead to lower acquisition of business costs for providers, which would have a positive impact on their margins.