Aegon has insisted that last week’s redundancies and office closures within the sales division are not a kneejerk reaction in the firm’s drive to reduce operating costs by 25 per cent.
The firm revealed it is making 142 redundancies in its sales division and halving the number of regional sales centres from 12 to six in a bid to cut a quarter of its costs by the end of 2011.
UK sales director Duncan Jarrett says plans for the restructure have been under way since August 2009 as the company reassessed the future of the intermediary market and decided that the sales support function had to change to meet changing IFA needs.
He says: “We asked ourselves ,what the market is going to look like and what we are going to need to support that.”
The answer for Aegon is a rationalisation of the regional sales centres from the existing 12 down to just six based in Glasgow, Manchester, Birmingham, London, Bristol and Guildford.
Jarrett says the redundancies among the sales staff are being offset by the creation of 36 new jobs, mainly in sales support for corporate benefits.
He insists that the reduction in jobs will not adversely affect IFAs. He says: “The service IFAs should be getting after this should be better than what they are currently getting.”
The new structure will see all the administration of new business handled by a centralised office in Edinburgh, which will free the regional centres to offer support to IFAs and paraplanners.
Although the number of sales support specifically for IFAs is to be cut from 98 to 65, there will also be 65 staff dedicated to providing paraplanner support.
During a six-month trial of the new structure earlier this year, Jarrett says the time it takes to write new business fell by up to 60 per cent.
He is also confident that the centralisation of administration should iron out inconsistencies that had started to creep in due to initial admin being carried out by the 12 different regional offices.
He says better use of technology will allow consultants to spend much more of their time doing tasks that are actually valued by IFAs, such as giving quotations, diary management and making sure that applications are being processed.
Jarrett says more businesses would prefer contact over the phone or online to deal with standard cases but there will still be face-to-face contact for those businesses that want it.
He says: “Historically, we have been big supporters of large local firms, which is why we have kept the six regional centres.” He adds that for businesses that normally use remote contact, there is the option to escalate their contact with consultants if a case requires it.
Jarrett says: “We do have an escalation process built in. If you are being looked after over the phone but have a very complex or big case, then there is scope to get face-toface support.”
The changes are going the be phased in over a three-month period and are due to be completed by the end of January next year.
Jarrett says that he is unable to rule out further redundancies in the sales division and there are still announcements to come for further restructuring in other parts of the business but he says the most painful restructuring for the sales team has been announced. He adds: “Could it mean further tweaks? I think it could but fundamentally this is the core of what we want to achieve.”