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Tony Kempster

Only a couple of weeks into a new job, it is not usually ideal to hit the headlines with news you are withdrawing the revenue stream from your major distribution channel through cutting initial commission on regular-premium pensions.

And when your last job was running one of the biggest IFA networks, DBS, the first action from Tony Kempster as Prudential Intermediary Division distribution director seems to jar a little more than usual.

Regular readers of Money Marketing&#39s Inside and Outside Edge columns cannot have failed to notice the irony of Kempster&#39s recent role reversal after leaving DBS in November.

Of course, a man of his experience was not going to stay out of the industry for long but his appointment was shrouded in controversy. His new job left former Scottish Amicable sales director John Cowan (an Inside Edge regular) without a role and came alongside a raft of senior management changes.

And with the news that ScotAm is ditching its appointed representative business, Kempster is clearly not prepared to lie low.

DBS members were rocked by Kempster&#39s sudden departure from the network at the end of last year. One DBS member says: “When he was at DBS he was a great man of the people. He would come to all the regional meetings and could really relate to grassroots level IFAs.”

Speaking about his former employers, who were subsequently taken over by arch-rivals Misys, Kempster says he was genuinely surprised by the deal.

So given Kempster&#39s background as the champion of the IFA cause, advisers are struggling to understand what exactly Kempster and the Pru are up to in terms of their positioning.

Under Kempster, Pru is not going to be a “waterfront” provider to the IFA market. Rather than a blanket product provider, it is shifting its focus towards the over-45s market, concentrating on annuities and bonds. This is behind the decision to abandon appointed reps.

“You need a broad range of products when dealing with the public direct through appointed reps and that does not work with our aims, so it is the inevitable strategic conclusion.”

The 52-year-old remains pragmatic about the Pru&#39s decision to scrap initial commission on regular premium pensions, saying the response from IFAs shows most were not too surprised by the move. “There are those IFAs who know commission levels are coming down and are focusing on people with already accumulated wealth. They have shown empathy. There are others I can&#39t convince and I&#39m not about to try.”

Some believe Kempster is turning his back on the IFA community. One DBS member said: “Getting rid of initial commission flies in the face of what he was preaching at the network. He would say we shouldn&#39t be leant on by providers to determine how we are remunerated. This is a bit contradictory.”

B ut he has not completely lost his head amid the ivory towers of giant life insurance corporations. He is concerned that many IFAs have still not grasped the seriousness of the Sandler review and just how fundamental its outcome could be.

He hopes Pru, which is devoting a senior team to draft a Sandler response, will stick its head above the parapet and lead a proactive debate.

“Like other providers we are peering into the fog of the Sandler review and the polarisation review and are trying to establish which elements will remain. A lot of IFAs are in review overload and are ignoring this. They have not clocked its significance.”

He is not slow to criticise providers, believing them guilty of not making IFAs more aware of the changes to commission levels that lie ahead.

“Product providers who continue to pay high levels of commission are perpetuating what is essentially doomed. They have to take some blame in not making it more clear to IFAs.”

He is also surprised by the attitudes that still reign through life offices, saying he is amazed by the “sense of self-importance” some providers have.

Kempster wants to break down the lumbering tank that is the Pru and is determined to make its intermediary division a more nimble operation that can react efficiently to customers&#39 needs. Like the way an IFA network operates with a battalion of smaller firms working within the support of a bigger group, he wants the Pru to be more able to adapt and change the market.

“We need to use our immense financial strength, market position and brand and ally it with the ability to move quickly. It is possible for us to do that, but we have to communicate better with the market and the reasons behind what we&#39re doing. We don&#39t want to be the biggest player in the market. We want to be the most profitable.”

Kempster is a straight-talking man, so much so that he has to “have a minder” to make sure he does not give away too much. With the weight he appears to be putting behind Pru and its decisions, however, he really does not seem to need much minding.

Despite his tumultuous first few weeks at the Pru, he says running DBS was “the toughest job I&#39ve ever done, but immensely enjoyable”. It is clear that a little piece of Kempster&#39s heart will always be devoted to IFAs.

Born: December 17 1948.

Lives: In Berkshire with his wife Margaret.

Education: MBA from Cranfield, Master in Interactive Media.

Career: 1968/74 broker consultant, 1974/79 worked in Jamaica as IFA and Government, 1979 returned to UK to study for MBA, then took marketing role with UK Provident, 1988/94 built up IFA division at Prudential, 1994/98 ran own multimedia business, 1998/2000 chief executive DBS.

Career ambition: To make a difference to the market and help IFAs have sustainable businesses.

Life ambition: “I&#39ve been married to the same woman for 25 years and have four amazing kids. What more can I ask for?” Likes: Cars, motorbikes, food and Liverpool FC.

Dislikes: People who give up too easily and lack passion. Slow cars.

Car: Ford Focus, but soon to be an XJR.

Peers say: “Tony is one of the strongest strategic thinkers in the business. His understanding of the IFA market is tremendous. He has got a tough job to work out the Pru&#39s positioning with IFAs but Tony&#39s the man to do it.”

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