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Axa closes UK bancassurance arm; 450 jobs at risk


Axa is set to close its bancassurance division following a strategic review of the business, Money Marketing can reveal.

Axa currently has two UK banking partners – the Co-operative Banking Group and Clydesdale and Yorkshire Banks.

The decision to close the bancassurance arm will result in the loss of approximately 450 Axa UK roles and a period of individual consultation has now started.

Axa UK chief executive Paul Evans says: ”Axa UK remains a strong advocate of consumers being able to access affordable advice for their particular investment needs. 

”Following similar announcements by major retail banks, we are very disappointed that Axa UK must also now withdraw this service having not found a model which balanced the regulatory requirement that the service be profitable in its own right, whilst setting advice fees at an affordable level.”

Axa also operates an appointed representative model with West Bromwich Building Society. It says it will continue to support this arrangement whilst West Bromwich transitions to a ”new model”.

The closure of Axa’s bancassurance arm follows Santander pulling out of investment advice last month. The move by Santander led to 724 job losses, with 150 staff kept on to look after existing customers.

The number of bank advisers as at 31 December was down 44 per cent on December 2011 figures according to FSA data, from an estimated 8,658 in 2011 to 4,809. Overall the the total number of retail investment advisers fell 23 per cent from the 40,566 estimated by the FSA at the end of 2011 to 31,132 at the end of 2012, the first day of the RDR.


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There are 38 comments at the moment, we would love to hear your opinion too.

  1. “And another one bites the dust” ding dong the business is dead !

  2. And another nail in the coffin for average man/woman who seeks advice. Where will it end RDR has certainly been the biggest detriment to custopmers seeking/needing advice.It is no good saying financial advisers will gain because only HNW clients will p.ay. FCA charges are going up so advisers who stay will have to charge moreLower income clients cannot and will not. FCA should now take note and allow customer choice as to how they pay be it commission/fee adviser chargeing

  3. Another RDR success story.

    Hector Sants – How do you sleep at night?

    Each one of these 450 people has a life, commitments and families to support.

  4. Nicholas Pleasure 15th April 2013 at 2:44 pm

    Does anyone at the FCA know the answer to the following question?

    How many people have to lose their jobs before you will review the stupidity of RDR?

    All answers gratefully received.

  5. @ Nick Pleasure

    The answer is simple: The FCA will finally take notice and review the RDR when the number of advisers falls so low that some of their overpaid, over pensioned, over holidayed personnel have to be made redundant.

    Basically when the FCA gravytrain starts to hit the buffers. I think this may happen sooner than any of us dare to dream.

  6. It must surely be clear to even the most rosy-spectacle tinted bureacurat that far from improving anything the RDR has caused Katrina-style damage to an industry that once stood proud and serviced millions of consumers.

    Compassion, common-sense and balance is missing at E14.

  7. A good friend has just lost his job here, young family, huge commitments. Feel very sorry for those losing their jobs. I cannot see how all of this will benefit the consumer or indeed the economy going forward. Whilst a big advocate of independent advice, I cannot see how less consumer choice makes any sense.

  8. I’m now wondering how things would have gone for Sir Hector at the TSC if he had told them that the RDR would cost the jobs of around 50% of bank advisers.

    Would this have been an ‘acceptable’ price to pay for an ‘improved’ marketplace.

  9. Would the average man / woman want advice from an adviser incapable of passing simple multiple choice questions on areas they are giving advice on? I wouldn’t.

  10. The FSA/FCA forget one important thing when imposing RDR on the industry – banks and large product providers aren’t dependent on the profits from giving advice so will close down this part of their of their business when it ceases to be profitable.

    The fact that no one saw this coming is quite a sad indictment of those in charge of the industry.

  11. I think we need to look at the big picture here.

    Yes, RDR has without doubt contributed to what has happened in the FS industry, but there are other, equally important factors too in my opinion.

    It has irritated me for years that regulated financial advisers were “bound and gagged” virtually with what we could say and do and yet some un regulated guy, Martin Lewis, could go on TV and virtually say what he liked. He is now a multi millionaire thanks to his sell out to Moneysupermarket.

    Then of course we have the “ambulance chasing” claim companies. Again, for years I’ve attended FSA roadshows and asked if the FSA would step in and stop their shady practices – not a chance.

    Now we have a double whammy – solicitors jumping on the bandwagon too now their legal aid gravy train has been de railed. IFA’s – be afraid, be very afraid. These guys are honing in on pensions and investments more aggressively than the ambulance chasers are with PPI.

    With MMR looming I can only see things getting worst for our industry, not better. Once regulatory fees become so colossal it is no longer financially viable for any of us to remain in the industry, the bloated, out of control regulatory behemoths in their ivory towers, might just sit up and take notice

  12. Do we still have any bancassurers left? By my reckoning, Nationwide Building society appear to be the only large organisation still giving advice, but then they won’t advise on pensions at all – probably only a matter of time for them too…

  13. @ Marc | 15 Apr 2013 3:30 pm

    If you read the article this is clearly not about the advisers being unable to pass exams. This is about advisers with the correct exams losing their jobs.

    The problem is not one of qualifications.

    “we are very disappointed that Axa UK must also now withdraw this service having not found a model which balanced the regulatory requirement that the service be profitable in its own right, whilst setting advice fees at an affordable level.”

  14. @Marc 3.30: I thinky you will find, Marc, that every adviser in that particular banc assurance arm WAS fully qualified!!! The bancassurer could not have started into 2013 if they were’nt. The banks just could not get a fee model that was going to be profitable and sustainable that clients were willing to pay. It really is that simple and as Ian @ 3.28 said – there will be more to follow. Would suggest you point your scepticism at the regulator not qualified advisers. Before you ask, no i am not one of those affect – I am an IFA (about to go restricted)

  15. Idiot in the corner 15th April 2013 at 4:40 pm

    Marc, would you rather these clients take advice from Martin??

    Or maybe just go online and self advise?

    We now have a higher qualified advice force but yet they are unable to give advice!!

    The worlds gone mad!

  16. I am very close to this story (let’s leave it at that) and believe me this is all about costs vs income. Some industries (such as tobacco) have the ability to absorb cost increases by passing it onto the consumer. Retail financial services does not. You can only charge so much….so when regulatory fees increase to help the FSA balance their books (like their pension fund deficit – where they are paying in approx. £19m per year over 10 years)…then it leaves a company with less ability to meet the increased costs. Once the business becomes uneconomic that’s it lights out….

  17. Andrew Tideswell 15th April 2013 at 5:58 pm

    @ Marc. I suggest you get your facts straight before you start spouting your nonsense. Multiple choice questions?? I’m taking it you haven’t even looked at what is required to pass the level 4 diploma.

    @ Jim Gillespise. I couldn’t agree more. Martin Lewis is a far bigger ‘risk’ to financial services than level 4 diploma qualified financial advisers.

    As one of the one’s affected by this, the FSA have not only shafted the bancassurance sector and all those affected by redundancies, they have shafted the thousands and thousands of men & women in the street who need financial advice and now have very few places where they can obtain it.

    Well done RDR and the powers that be.

  18. Another one bites the dust 15th April 2013 at 6:24 pm

    As one of those affected today all I can say is ” will the last one out please switch off the light”.

    AXA were a good company with clients that appreciated the advice they were given……and at a cost they were happy with! This is a sad loss with bigger implications down the line…..long term financial planning,pensions,life savings…..all areas that 10000s of clients will now have to seek out alternative advice on. These are people that will stop taking out life cover, stop providing for their retiement, stop investing in alternative assets such as equities and generally retreat in fear of the mire that is financial services today.

    Well done the FSA/FCA and your secret little plans to create a fee paying environment that you can control ie your fees go up and the advice fees rise accordingly like perol on a forecourt. I hope you sleep well tonight……because I wont!

  19. @Marc 15/04/2013 @3.30pm- having read your dribble about multipe choice exams i can only assume you are one of the many who couldn’t pass it and got out- envy can make you sad and bitter.

    I am one of those affected by todays announcement and believe me AXA in my opinion ensured that anyone who advised a customer was fully trained and compliant.
    What I feel about today is sadness not just about losing my job, but also about the customer. They are not all people with loadamoney. they are people looking to trust an adviser who will advice and ensure that their finances are looked after till when they need it or ensure their loved ones are protected.
    What RDR has done is destroy this culture and the sooner they listen to the real customers and not just the bigwigs sitting in judgement it will take a long time to restore belief in an already ailing industry which cannot afford to fall any further.
    When are they going to listen to the voices that have shouted for help rather than those who want to make a quick buck as Jim Gillespie has said

  20. I share the sentiment of many on here, as I wrestle with trying to make RDR charging work.

    I am evermore convinced that this is the start of the end, unless the remuneration process is reversed to give back choice to consumers.

  21. I am struggling with some of the comments on this thread and also AXA’s rationale. In December an adviser could take for example 3% commsion plus 0.% as trail commission and everything was rosy. In January, what is the issue with asking a client to pay a 3% fee, (which can be taken via the product provider, so the client still does not have to make a separate payment) and then offering an angoing service arrangement for 0.5% p.a. – where has this changed? Are the people who are moaning and saying the industry is doomed saying this because they were not, in a pre-RDR world not explaining the level of commission they were charging the client – if they were I cannot see how this has changed?

    I am willing to listen to an explanation from an adviser who fully disclosed their commission to a client and explained that this money was coming out of their fund and they (the client) were paying this, who now cannot offer the same level of service for the same fee as the client is unwilling to pay for this service – they were paying before hand and as long as you told them, not a great deal has changed.

    Does this show how much the single tie service providers were taking out of the products and not letting the customers know?

    Willing to be shot down with a good reason to the above questions!

  22. @Marc 3.30
    Would you take advice from someone incapable of reading?
    Sorry for all at axa who have lost their jobs. Most will have families/mortgages to contend with.
    The regulator cares not a jot for the human cost. Hector already told us so.
    The queues at MA’s house will be getting bigger, she will need more money soon.

  23. stephen rowland 16th April 2013 at 10:35 am

    Matt – It is the PERCEPTION that all Financial Advisers are robbing *******s &we are all like Accountant’s & Solicitors so will not engage AT ALL!

    This is the real problem!

    It is fine in leafy Surrey / London – you try it where the average wage is £20k p.a & clients have a job paying the Mortgage – not quite then so easy!!!!

    After all – I thought RDR was meant to increase access to Independent Financial Advice – but we all know it’s done the exact opposite!

  24. 4 months of RDR and just look what’s happening. Even I didn’t think it would all go ‘pete tong’ this quickly ! Yes more will follow and the old balance sheets will collapse until eventually one of ’em will beat a path to the door of the OFT claiming

    ‘restriction of trade’

    and like every other commercial enterprise in the world

    ‘we should be allowed to pay to market our products’

    I gave it 9 months or so last year might be a bit quicker than that at this rate.

    Anyone like to wager who will be the first ? or perhaps they’ll do it mob handed

  25. I’m in agreement with Matt (8:58).

    We have operated a client agreed remuneration approach for a long time and therefore after RDR nothing really changed for us.

    We continue to explain what we charge, why we charge it and how it’s charged.

    Yes, choice is now less in terms of how we charge for our advice (i.e. no commission option) but in the past few pieces advice were paid for via commission in any case and we always gave the fee/commission option.

    I’m of the opinion the impact from RDR has fallen hardest on those business models which were charging for advice but not making that fact clear and, perhaps, weren’t adding value. Post RDR clients see clearly the cost and as a result will ask what they are receiving for that charge…..

  26. There is a more destructive message here. Think less about the fees vs commision argument. Quite frankly, if you explained commission correctly in the first place, what it is for, where it ultimately gets paid from, then new fee models are not the problem.
    What about the overall decline in client numbers actually receiving advice? How many clients have you spoke to in the past, having been shoe-horned into a bancassurance product, now want to look at the bigger picture. You’ve then done your work and provided them something more suitable, earning your fee in doing so.
    Whilst I am by no stretch of the imagination an admirer of bank products or the way in which advisers sell them – would that client be with you right now if they had not been convinced to move the money from a fixed-rate deposit in the first place?

  27. Anonymous | 15 Apr 2013 3:45 pm

    HSBC and Nationwide by my reckoning are the only high st bankassurers/b’society.

    Again I feel for the families of those who have lost their jobs, livelyhood.
    Who is next………

  28. I 100% agree with Matt at 8.58 on 16th April.

    If SJP can swap the word “commission” for “adviser charge” and continue as normal, why can’t AXA or any of the banks?

  29. in answer to anonymous 15/4 3:45:
    Nationwide will be next, speaking as an insider, their post RDR model is unsustainable and is unlikely to last. Their restricted advice model is very restricted – no pensions at all.

  30. I love the way that most IFAs believe that the reduction / closure of bank based advice will lead to a mass influx of clients desperate for their advice…pls wake up and smell the coffee…most people don’t seek advice and are generally ‘sold’ products by advisors who are either driven by commission, or meeting sales targets to achieve bonus!

    If it wasn’t for bank based advice, I don’t think the IFA industry would exist, as all IFAs I know were once bank / tied advisors who went IFA to churn all the business they had already written.

    I find the whole industry a complete joke, as soon as you’re forced to fully disclose your fee’s, your clients and business levels reduce. This implies that clients weren’t aware what they had been paying in the first place??

    I’m sorry for the unfortunate ones who will lose their jobs, but I believe that the recent heavy handed regulations are a result of the malpractices that have been going on within the industry for years.

    Finally, it amazes me how advisors compare themselves to fully qualified accountants and solicitors etc. I’ve never met an advisor who’s had to study intensively from between 3 – 6 years to achieve Level 4!!….Most investment advice is speculative (but the advisor will still get their fee regardless of performance), and protection advice is common sense (I have a mortgage and young family, perhaps I should get some protection??)….the whole industry is doomed, get out while you can before it eats you up and sh>

  31. ‘I’ve been a silly old Hector !’

    But I still walked off with a huge payout and a knighthood. The Tories said they wanted to reduce the emphasis on financial services in this country. They’ve certainly done that…..

  32. The future of financial services in the UK lies with direct selling via the internet, or direct sales forces where providers have full control over the activities of their staff. IFAs are only suitable for a few wealthy individuals. Most others would be perfectly well satisfied with a basic financial education, and a simple on line risk profiler linked to a simplified range of risk controlled funds.

  33. John Butterworth 18th April 2013 at 11:17 pm

    There is far more to this story than meets the eye.

    The Britannia relationship was long standing and profitable. The Clydesdale/Yorkshire relationship was a disaster with ridiculous contractual obligations for AXA to cover branches which could never cover an adviser’s modest basic. Their senior management should be shot for even getting into those contracts.

    Running alongside this however, is a longstanding internal investigation into systematic misselling in the Clydesdale/Yorkshire arm, bullying of advisers, cover ups by senior management and hush money to whistle blowers.

    Perhaps it would interest everyone to know for example that between 2009-11, 90% of all money invested through Clydesdale and Yorkshire Bank, went into the AXA distribution fund, with only a marginal drop since then.

    This was based on a false “story” that advisers were told to pass on to clients verbatim that the fund had never lost over any 5 year period in history. It was a compelling story, and one many thousands fell for.

    Perhaps someone at AXA would like to explain that statistic and how that was ever a good customer outcome?

    I have great sympathy for the honest ones who have lost their jobs, but nothing but disdain for the many dishonest ones who stole a living as an ‘adviser’ channelling every client into one fund.

    Shame on you, and good riddance.

  34. The lack of response would indicate that I’ve hit a few nerves??!!!

  35. Well done FSA, once again you have shown your total incompetence.
    Would suggest that a review in 2014 is a bit late. Oh, by the way dont forget that the finance industry pays your bloated wages and benefits and there may not be much of it left soon!!

  36. @ Michael Hunt – and what do you do for a living? Why so insulting? Most advice is just common sense, what we do is NOT rocket science or brain surgery… so what? People want coaching and advice and will pay for it. I don’t think the drop in adviser numbers is good for anyone as wee do’thave the capacity to take up the slack of those in the accumulation stage who will not be sold to by a bank adviser now. Most of our client ( kngoing service) work is 5 years or so either side of retirement and customers (transactional) is where the problem will lie with the drop in numbers.

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