Co-op looks to sell life arm to Royal London - 670 jobs to go
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The Co-operative Group is making 670 financial advisers redundant as it announces plans to sell its life arm to Royal London and a seven-year distribution partnership deal with Axa Wealth.
The Co-op has entered into exclusive talks with Royal London to sell its life insurance subsidiary, including the £15bn of assets in its Long Term Business Fund and The Co-operative Asset Management which manages the fund.
The announcement follows a strategic review of Co-op’s life and savings business. Staff were notified of the move at meetings this morning.
It will see the withdrawal of of Co-operative Financial Services’ field-based advisory team, leading to 670 job losses.
A further 82 branch-based advisers will offer Axa products, under a partnership deal between Axa and Co-op which will see Co-op’s branches offering Axa’s investment, pension and life assurance products. Axa will also deploy 325 advisers across the branch network.
CFS’ general insurance arm was outside of the scope of the strategic review.
The deal echoes the existing arrangement CFS subsidiary Britannia Building Society has with Axa.
CFS launched a strategic review of its life and savings business in October 2009, after merging with Britannia in August 2009.
The move follows the sale of Co-op Bank’s IFA arm to Ashcourt Rowan Financial Planning last September.
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 understand that such news may be difficult for impacted colleagues and 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 regards 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:”The employees potentially affected by this news will be deeply concerned and upset. Unite has already made clear that the decision to cease to be a provider of life assurance products is a very sad and monumental moment in the history of CFS and the whole of the co-operative movement.
“Unite is now pushing for redeployment options wherever possible and to where this is not possible, for all involved to be treated fairly during the process.”
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Readers' comments (45)
Anonymous | 15 Jul 2011 12:21 pm
As ex-CIS staff, I find this news very sad, but probably not hugely surprising. The writing has been on the wall for a long time, and I think it's unfair to suggest management haven't explored every other option.
Good luck to everyone affected.
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Mchale | 15 Jul 2011 12:33 pm
Being coming for a long time, directionless leadership and a move away from their core market with a lack of focus over many years. A shambles, they need to drop co-operative from their name because what it means and what they stand for are at odds.
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Anonymous | 15 Jul 2011 12:36 pm
"However, we were faced with rising regulatory costs"
WEll DONE FSA & RDR, you must all be feeling very puffed up at canary towers this morning.
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Andrew | 15 Jul 2011 12:49 pm
Shame to see them go, the commercial reality of RDR is looming and the majority of these guy's are Diploma qualified!
So that is thousands more people without access to an Adviser.
Still that is LESS money in fees to the FSA, are the remaning investment authorised IFA's to pick up tab or will the FSA reduce their staff numbers accordingly?
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Anonymous | 15 Jul 2011 12:55 pm
As and ex CIS adviser I am glad I was all part of it, good training, huge base of customers and a good atmosphere to work in. Shame it's all gone!
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Anonymous | 15 Jul 2011 12:56 pm
You can't pin this on the FSA and RDR.... that's something that the entire industry have been aware of for years and not the true cause of this
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Patrick Schan | 15 Jul 2011 1:00 pm
I, also, imagine much of this was attributable to RDR. For these poor people that will lose their jobs thank you Hector; while you enjoy living off the rest of us.
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Anonymous | 15 Jul 2011 1:03 pm
Looks like redundancy for all L&S staff then. Wonder if it is gardening leave straight away....
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Anonymous | 15 Jul 2011 1:16 pm
What a great shame. Another coup and cock-up for the Government and FSA to celebrate. Clearly the Government, FSA and banks are working hand in hand. It is plainly obvious that what they want is for the general public to invest their monies with ONLY the banks, who, let's face it, are the ones who are really running,m and ruining this country.
IFAs, advisers and agents have been a sitting target for years. Rules, Regulation, qualifications, goal posts being moved time and time again. what is next on their agenda? Amazing how Esate Agents and car salesmen go unregulated when the IFA gets pummelled consistently.
IFAs and Advisers alike should form a massive protest, and let this Government know that you've had enough. Let this Government hear you. Insurance Companies should have protested against Regulation in the first place.
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Anonymous | 15 Jul 2011 1:20 pm
Welcome to the realworld of being IFA.
Pity clients wont have access to SALESMEN anymore.
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