Co-op axes field force in Axa deal
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Co-operative Financial Services is cutting 670 adviser jobs following a strategic review which has resulted in talks to sell its life arm to Royal London and a seven-year distribution deal with Axa Wealth.
The Royal London deal to sell the CFS life insurance arm includes £15bn in assets held in its long term business fund and Co-operative Asset Management which manages the fund.
A seven-year partnership deal with Axa Wealth will see Co-op’s 82 branch-based advisers transferred to Axa to sell the provider’s investment, pension and life insurance products.
The deal echoes the arrangement already in place between Axa and Co-op subsidiary Britannia Building Society. Axa products will now be offered in 338 branches across Co-op Financial Services and Britannia. Axa will deploy 325 advisers across the branch network.
The strategic review of Co-op’s life and savings business was launched in October 2009 after it merged with Britannia in August 2009.
As part of the review, Co-op has decided to axe its field-based advisory team with 670 job losses. Advice staff were notified of the move last week and have now entered a 90-day consultation period.
Co-op expects to report on the progress of the Royal London talks within that three-month period.
Co-op’s general insurance arm was outside the scope of the review.
CFS chief executive Neville Richardson says: “We have taken the time needed to consider all our options and find a solution which is ultimately in the best long-term interests of our customers and members. We have not reached this outcome lightly. However, we were faced with rising regulatory costs in a business which was increasingly becoming sub-scale. This move supports our strategy to focus our specific attention on our banking and general insurance areas where we have a growing and strongly differentiated competitive position.
“With regard to our negotiations with Royal London, our exclusive talks remain ongoing but I genuinely believe that a mutual solution for our life fund would be in the best interests of policyholders and colleagues alike.”
Unite national officer David Fleming says: “Unite has already made clear that the decision to cease to be a provider of life insurance products is a very sad and monumental moment in the history of CFS and the whole of the Co-operative movement.
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