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Brexit not to blame for rising costs

Brexit not to blame for rising costs, say advisers

  • Rising costs are being driven by the cost of compliance and insurance
  • Clear business structure can help reduce premiums
  • Only 6% of advisers say Brexit to blame for rising costs

25 July 2019, London – The vast majority of advisers [94%] say Brexit is not to blame for rising costs, with most pointing towards the increasing costs of compliance [81%] and insurance [61%], according to new research from Canada Life*.

Neil Jones, tax and wealth specialist at Canada Life, said:

“While Brexit is a familiar figure of blame for many ills, so far only a few advisers think it’s causing rising costs. Advisers may well be holding their breath here to see how Brexit unfolds.

“However, there are areas where we can be clear on the potential impacts of Brexit. Some international jurisdictions may well be better than others when it comes to costs. The Isle of Man is not part of the EU/EEA today and so we should see no change to the trading relationship between the Isle of Man and the UK as a result of Brexit. Likewise we expect no change via Dublin, which is expected to be subject to the existing EU regulatory regime as it is currently.”

Rising costs

Compliance is cited by four out of five advisers [81%] and insurance by three out of five [61%] as driving cost increases.

Neil Jones, tax and wealth specialist at Canada Life, said:

“Compliance and insurance are inseparable when it comes to costs, but that can also be a good thing as there can be a shared solution. Typically, the higher the compliance risk the higher the premium. Smaller firms should make sure they have clear structures in place in their organisation that focus on complying with regulations – this gives insurers a degree of confidence that can result in reduced premiums.”

What’s driving increasing costs:

  • 81% said compliance driving costs rise;
  • 61% said insurance
  • 6% - said Brexit was a factor
  • 7% said costs not increasing
  • 5% said marketing costs

*Survey conducted using Survey Monkey in June 2019 among 250 advisers.

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Canada Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

Canada Life International Limited and CLI Institutional Limited are Isle of Man registered companies authorised and regulated by the Isle of Man Financial Services Authority.

Canada Life International Assurance (Ireland) DAC is authorised and regulated by the Central Bank of Ireland.

Stonehaven UK Limited and MGM Advantage Life Limited, trading as Canada Life, are subsidiaries of The Canada Life Group (U.K.) Limited. Stonehaven UK Ltd is authorised and regulated by the Financial Conduct Authority. MGM Advantage Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority.