Friends Provident to to update on FSA shake-up

Friends Provident is expected to update investors on the impact of an impending shake-up in the financial services industry when it reveals its maiden full-year results next Wednesday.

Pre-tax profits are tipped to hit £230m (€378m), with an estimated dividend of 3.3p.

The group is expected to have benefited from new business sales in the second half of last year.

Its first-half sales were hit by volatile equity markets and a collapse in demand for mortgage endowment products.

Market-watchers will be keen to see how Friends Provident will be affected by the Financial Services Authority's plans to overhaul the selling of financial products.

Under the FSA's proposals, independent financial advisers will be required to charge fees and rebate their commission in order to call themselves independent.

It is a change that could hit Friends Provident, said Richard Schroder, of Barclays Stockbrokers.

He said: "It's still fairly unclear as to how deeply Friends Provident's market share will be hit by these changes.

"The bigger companies, such as CGNU and Prudential have a lot more going for them, but it's much more in the balance for Friends Provident."