Provider to focus on offshore bonds and annuity business
Canada Life has closed its onshore bond and personal pension operations with immediate effect with its wealth division’s focus now shifted to offshore bond products.
The provider said the closed products represented about 1% of its customer base and it remained committed to the UK market where it “can operate at scale and be competitive”.
The Select Account and The Retirement Account have closed to new business from today (23 January). It added that would now enter a period of consultation with impacted employees.
The onshore bond had about 17,000 customers, while personal pension garnered 5,000 customers since launch in 2015. It explained half of the customers using The Retirement Account were using it as a flexible annuity only.
The business said it UK offshore bonds represented a “growth opportunity” and would target its resources in that area. It added it would also still operate in individual annuities, equity release, group protection, bulk annuities, and asset management.
Canada Life UK managing director and executive director for wealth Sean Christian said: “We’ve always said we will compete where we can reach scale and be competitive, and it has become clear we need to take the decision to close these products, which represent less than 1% of our customer base.
“While we recognise this will leave some advisers disappointed, it does mean we can focus on areas of profitable growth, where we can leverage our resource to deliver a better experience for advisers and their clients, including our market-leading UK offshore bond range, via our businesses in the Isle of Man and Ireland.”
He added: “We see significant potential to grow our market share in the offshore space via UK advisers, where we think the market is presently underserved. This is being driven by growing demand for clients to consider broader planning opportunities, given the UK’s high tax burden and ever-changing legislative environment. We look forward to working with a wider range of advisers to show the value of our range of investment, trust, and estate planning solutions.”
Canada Life explained the closure of the onshore bond follows a trend of an overall decline in the market, with advisers preferring “open-architecture products available on platforms, alongside the relative attractiveness of other tax wrappers and savings options”.
It added that its personal pension remained a “small and niche” product in a “very competitive market segment” and would require significant additional investment to generate the sales volumes required to make it profitable.
Canada Life said there would be no change for existing customers and any pipeline business that advisers chose to complete “will be honoured for both onshore bonds and The Retirement Account, within any quote guarantee periods”.