Prudential seem to be feeling the pinch after deciding they only want to deal with people aged 45 to 74 with assets over £10,000. They are also intending to cut their product range to remove the non-profitable ones.
Speaking at a recent conference, Mark Wood, Prudential's European and UK Chief Executive said: "The regulatory changes that face the market mean we will move to a market where independent advisers will be advising from a narrower range of products and consumers will get a more restricted choice"
Speaking alongside Mr Wood was the Chairman of Morgan Stanley, Sir Brian Pitman. His comment was: "Cross subsidising was fine when we all made piles of money. Now you have to get rid of unprofitable business".
Our View
Prudential seems to be snubbing the younger and lower paid population in their search for profits.
Whilst every company must make a profit, there is a certain way of going about it and this is not it. If certain products are not profitable they can be restructured or closed. However, blatantly using profitability as the reason will not inspire confidence amongst policyholders.
Many of the existing Prudential policyholders helped in the building of the business and that should not be forgotten. Without all types of policyholder Prudential would not be where it is today.
The decision to concentrate on the more affluent might rub salt into the wounds of existing Prudential investors but should sweeten the shareholders.
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