David Kneeshaw, chief executive of RL360°, told International Adviser’s Fund Links Forum on Thursday that it was possible some advisers would move their business away from Isle of Man companies to those located in less well-regulated jurisdictions.
“There might be Isle of Man companies which suffer a short-term dip in sales in 2019 because some advisers could choose to take their business elsewhere,” he said.
The Isle of Man regulator has decided that insurers and their branches around the world will be required to provide bespoke information to clients about exactly how much commission they pay for insurance products from January 1, 2019.
As a result, said Kneeshaw: “There is going to be an issue of regulatory arbitrage.”
“I’m going to make sure consumers know the difference between a good jurisdiction and a dodgy one.”
He added: “There has to be some concern in January 2019 that some advisers will go to dodgy jurisdictions for their business rather than the Isle of Man.
“I think it’s up to Isle of Man companies and others to say to the advisers you should be proud to put your business in a jurisdiction with good regulation. And it’s my job, among others, to convince advisers that what’s they should do rather than cutting and running to dodgy jurisdictions, Kneeshaw said.
The RL360° chief executive did not name the jurisdictions he had in mind though noted one was in the Indian Ocean and others were in the Caribbean.
Kneeshaw also pledged to lead a campaign highlighting the benefits of the good jurisdictions.
“I’m going to make sure consumers know the difference between a good jurisdiction and a dodgy one.” He said.
Kneeshaw’s presentation also highlighted what he saw as a bright future for international life companies and the advisers who sold their products, but he warned the industry was going through a period of rapid and significant change.
“I think the large part of it is going to be driven by the slow decline of front-end or indemnity commission,” he said.
“Strong companies will survive and do well and the weak companies will die. If you don’t get it right I think you’ve got big problems. If you get it right then I think there is a fantastic future.”
