Standard Life and St James’s Place as being tipped as the most likely winners from the retail distribution review (RDR).
It is less than a week after the RDR was implemented and in a note to clients Investec, the investment bank, described the regulation 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 was unique in its use of an ‘internal sales force’ and Standard Life, which positioned itself ahead of the game when it announced it would stop paying commission in 2006.
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 is not the only house to have picked up on SJP and Standard Life's potential in the post-RDR world - small cap star Giles Hargreave has snapped up some shares in SJP, and Axa Framlington's Nigel Thomas said he would add to his position in the wealth manager network if its majority owner Lloyds sold some of its share.
Investec also backed Aviva to enjoy a good 2012 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.
The bank said L&G could struggle because the RDR was predicted to have a bigger impact at the ‘everyman’ end of the market.
But over all, despite the difficulties and costs of complying with the RDR, Investec said it should be positive for the sector.
‘On balance, the upheaval in the UK life industry that the RDR is likely to induce should largely bypass the company,’ the bank argued.
‘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.'