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Axa Wealth launches non-advised platform paying adviser commission

Mike Kellard
Mike Kellard

Axa Wealth has launched a non-advised platform for clients who cannot afford advice post-RDR which will pay advisers commission for introducing clients to the service.

The company says its Axa Self Investor service will work alongside advisers’ existing models, for clients who want to manage a proportion of their investments themselves or cannot or do not want to pay for advice from next year.

Clients using Axa Self Investor will be able to access to around 170 funds through a stocks and shares Isa and trading account. They will also be able to invest in one of Architas’ six low-cost, multi-asset passive funds.

Commission will be paid either as a percentage of the funds under management in the stocks and shares Isa, paid monthly on a recurring basis, or as an amount based on the number of new clients who invest. Axa says the level of commission paid will be agreed between Axa and the adviser. It also says these payments will be able to continue under the FSA’s ban on fund manager and cash rebates, due to come in on 31 December, 2013.

The minimum investment is £200 a month, or a £2,000 lump sum. Clients using smart+ will be charged a flat fee of £4 a month, plus a wrapper charge of 0.5 per cent a year collected monthly from the client’s accounts.

There are no initial charges on funds, and no switching or dealing costs. Axa Self Investor will rebate clients up to 50 per cent of the annual management charge.

The service is built on the Elevate platform and will be co-branded with the adviser’s website. It can also be used to help the adviser with marketing support, managing email campaigns and product literature.

Axa Wealth chief executive Mike Kellard (pictured) says: “Axa Self Investor is a simple and easy-to-use investment service that we are confident advisers and their clients will value.

“This type of offering will be essential to firms who look to get maximum value from their client relationships, especially post-RDR, and will help to address the advice gap we believe the RDR legislation will create.”

Axa Wealth Direct announced last month it had appointed Ian Smith as head of distribution to develop the strategy for Axa Self Investor.

Axa Portfolio Services, the firm responsible for the Axa Elevate platform, saw pre-tax losses increase 29 per cent to £33.5m in 2011, compared to a £26m loss in 2010. The company attributed the loss in part to the development of Axa Self Investor.

Premier Wealth Management managing director Adrian Shandley says: “Once the Self Investor service takes off Axa will just ditch advisers. There is nothing to say it will not be writing to Elevate clients to approach them about the option to self-invest.”

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Comments

There are 7 comments at the moment, we would love to hear your opinion too.

  1. We are now seeing the very real consequences of RDR, which far from improving consumer outcomes, simply puts IFA services out of reach of the ordinary working family, who in fact are the people who need us most.

    Not an Unintended Consequence but intended

  2. £48 plus 0.5% p.a. wrapper fee – seems very steep to me, even if typical AMC will be 0.75%. Well off the pace vs the likes of ATS/Interactive Investor etc.

    But, then, coming from a life company this doesn’t surprise me in the slightest. I hate to think how many ‘strategy meetings’ etc it took AXA to come up such an unappealing B2C proposition.

  3. From what’s outlined above, I’m not sure how this will sit with the FSA given that the stance is seemingly that ongoing remuneration requires ongoing service to the clients.

    I wonder whether Axa are trying to circumnavigate this by agreeing remuenration based on the ‘book’ of business….?

  4. @Ned

    Is there any reason what an “adviser” can not simply give advice – for a fee – and then the client contacts Axa or more likely ATS or Interactive Investor to put the plan into operation, if they so wish ?

    Might it not be a good thing if advisers give advice, platforms administer, and fund managers manage funds, all without overlap ?

  5. If a client only invests the £2,000 minimum then a £48 annual fee plus a 0.5% anual wrapper charge is equivalent to 2.9% per annum. That’s before any fund AMCs. Why have such a low minimum if it’s uneconomic for the client?

  6. So Pandora’s Box is gradually opening with these new non-advised products. First we see Tesco and PO mortgagee, now non advised investment and they all pay for introduction. Soon be back to hard sell with no responsibility.
    Congratulations FSA for achieving nothing!

  7. The intended consequence is that this type of service might actually help re-engage many clients in using their adviser again. I can see no reason why both advisers and investors wouldn’t benefit from this service.

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