Following Axa’s purchase of the UK division of Winterthur Life, Kellard has been overseeing the restructuring of the distribution of the two businesses. But with the businesses each having a very different proposition and identity, this posed some issues as Kellard says they did not simply want to discard one side of the new business.
“You have seen it many times before, where two popular companies come together, there is a fight for dominance one wins and that is it, it is all over and you actually end up destroying value quite often.”
Kellard says this was something they were particularly keen to avoid. Axa Winterthur carried out a lot of research with IFAs on their attitude and relationships with the two companies and the results showed a strong polarisation of opinion.
“There were a number of people who were strong supporters of the Axa model, who did not use Winterthur at all. They wanted to have commission built into their products, and also they were big fans of the Axa Isle of Man business. There was another group of IFAs who were strong supporters of the whole Winterthur ideology, which has been based on very transparent, clear products and no commission built into the product. Then there was a third group of IFAs, who, for different circumstances, would find one or other of the propositions suitable for their clients depending on who the client was and what they were advising on.”
Kellard also says they were keen to avoid imposing a company view on the way IFAs run their business. “We did not want the new business to be viewed as the life companies of the past, where sometimes a number of them would have been criticised for being a bit arrogant, seen to be imposing their will on distributors – giving them what medicine they wanted to dish out. Rather than do that, we wanted to say let’s have a view on what we think should happen, but let’s listen to what our customers, who are IFAs, are actually saying to us.”
Instead of forming one new company, they decided to keep the two distinct but complementary brands and instead tackle the way they are distributed.
The result is Axa Winterthur Wealth Management. The new distribution business will use one sales team to market the products of the different companies, with IFAs deciding which company and which product is most appropriate for them and their clients.
“What we are doing really is giving them one point of access to both of these propositions. Both companies sit behind it but you can access them through one business development manager and we have got two powerful brands, powerful companies with their offerings.”
Kellard says all the products that were available before will still be available, although some IFAs may see a change in the personnel they deal with.
“You will be able to access an Axa Isle of Man offshore bond or an Axa onshore bond or a Winterthur Sipp, so the products themselves will remain the same but they will be delivered by an organisation called Axa Winterthur.”
Not everything will stay the same as Kellard says they are keen to change some things that can be made better across the board. In particular, he is keen to raise the quality of customer service, using the award-winning process from Winterthur Life to enhance the experience of all IFAs who deal with Axa Winterthur Wealth Management.
Kellard says the new business will also move away from being a simple manufacturer of product and although it might seem slightly contradictory for a business which is going out of its way to keep several distinct wrappers, he says the choice of wrapper is becoming less important. “The culture of the new business is not about getting more and more products and throwing them out, it is really about putting investment at the heart of the business. That has never been more important than a time like now. It does not matter what the wrapper is or what company it has come from. It is about what is inside that.”
Central to this idea was the creation of the new multi-manager business Architas. In conjunction with the Elevate wrap platform, the new wealth management business will be placed to enable IFAs to meet their clients’ investment needs, says Kellard. Architas took over the running of the Axa Framlington fund of funds this year and Kellard says they will have further announcements to make from the investment company later this year.
Kellard says the idea behind the new business, of allowing IFAs to choose the way they want to operate and helping support them doing so is the strength of the new business, not just for IFAs but for Axa and Winterthur themselves.
Although IFAs get the best of both worlds, with the financial strength of Axa and the quality of service that Winterthur can bring, structuring the business this way also benefits the Axa Winterthur business as Kellard says it should be well placed to capitalise after the RDR.
“It is likely that there will be at least two camps of advisers, one will be basing their business model around saying advice is at the heart of my business, that is what I charge for, the other will say I still advise clients but I actually get remuneration through the products I sell. There is nothing wrong with either of those. In fact, our society probably needs both of those. With what we have got in the Axa Winterthur mix, with both propositions, it is very easy for us to serve those markets.”
Kellard says away from the office he does not get much time for rest either. Although he is a keen golfer, he says he doesn’t find much time to play any more as he is kept busy looking after his two young sons.
He says the two boys, aged two and five, have developed a game that leaves him feeling like Inspector Clouseau in the Pink Panther films. “They will be hiding some-where in the house and as I come home they leap out and all they want to do is fight me. There is not time to unwind when you get home, if you are not careful you get beaten to a pulp.” When he does manage to find time to relax, he says he likes to spend time on the family boat moored on the River Hamble in Hampshire or occasionally finds time for the odd game of tennis which he took up recently.
Despite the sharp market falls this year, Kellard says the next few years will see the baby boomer generation really come to the fore and the billions of pounds they have invested will need looking after.
“Despite the fact that we are in times of economic doom and gloom, and I expect a very tough 18 months to two years ahead of us, I think we have put together a proposition which is pretty compelling, to improve service and give a much more wider choice to IFAs, which has the backing of a very strong group, and has a market where the underlying demographics mean it has to grow in the future.”
Lives: Charter Alley, Hampshire
Career: 2007-present: CEO, Axa & Winterthur Wealth Management, CEO, Architas Multi-Manager Limited; 2003-2006: chief executive, Winterthur; 1999-2003: group sales and marketing director then managing director, Winterthur; 1993-1999: national sales manager, Norwich Union Life and Pensions; 1992-1993: area manager, Prolific, 1984-1993: broker sales consultant, Legal and General.
Likes: Golf, boats, cars, Scuba diving, tennis and skiing
Dislikes: People who prevaricate and fail to turn their words into something tangible
Drives: Porsche 911 C4S cabriolet
Book: Touching the Void by Joe Simpson
Film: Tell No One (French thriller)
Career ambition: To go on holiday without mobile phone and Blackberry
Life ambition: Achieved already, with my wife Anne and my two boys Jack and Ben
If I wasn’t doing this I would be… In journalism and broadcasting