Colonial is ditching its IFA life and pensions arm following the surprise departure of head of sales and marketing Rod Lewis.
The move spells the end of a two year assault on the intermediary market by the Australian-owned life office. It is expected to herald a shift back towards direct-selling life and pensions with a focus on selling investments through IFAs.
Colonial converted its 500-strong direct salesforce to 60 franchises earlier this year. It is to add a further 30 franchises though estate agent Century 21 over the next year.
Lewis had played a major role in orchestrating the IFA drive. Colonial says it will continue to sell investment products through the IFA market using its asset management arm Colonial First State Investments.
The life office is remaining tight-lipped about job losses following the move but Colonial IFA sales director Fitzroy Burton admits he will be changing roles 'within the next few weeks'.
Analysts say the move shows Colonial has failed to break into an already competitive market and believes that the concentration on selling investments through the IFA channel may see it bidding for a fund manager.
Colonial launched a with-profits bond through IFAs in August 1997 and followed up with personal pension plans, critical illness and term insurance products.
It says it will continue to serve existing life and pension customers.
Colonial First State Investments, launched in April, currently markets an Isa-able Oeic with 18 sub-funds through IFAs.
Colonial head of public affairs Simon Anderson says: "Colonial went into the IFA market in August 1997 as a foray to see how we would make out.
"We are changing our emphasis to investments – we have been waiting for the investment arm to get up and running before switching emphasis."
Earlier this year to bolster IFA relations Colonial First State Investments recruited Mike Smith as head of business development, three investment sales managers and two IFA support staff.
Burton says: "I will have another role within the organisation but cannot say what it will be at present. We are excited about what we are doing."