Axa cuts 450 jobs as it ends face-to-face financial advice

Axa cuts 450 jobs as it ends face-to-face financial advice

Insurer blames regulations banning commission payments for move affecting staff based in UK bank branches

guardian.co.uk, Monday 15 April 2013 15.41 BST

Axa says it has withdrawn its in-branch financial advice because it could not find a profitable model. Photograph: Tom Saunderson for the Guardian

Insurer Axa is cutting 450 jobs in branches of the Co-operative, Yorkshire and Clydesdale banks under plans to cease face-to-face financial advice.

The group blamed the decision on new regulations that banned commission payments, forcing customers to pay up front.Axa has started consulting affected staff, who are based in bank branches across the UK but employed by the insurance giant.

Other firms including HSBC have also cut back on financial advice or restricted it to wealthy customers.

The chief executive of Axa, Paul Evans, said: “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.”

The insurer has sold life insurance and savings products through bank branches for the past nine years. Customers will now have to rely on call centres.

A government shakeup of the financial advice sector last October banned free advice in a bid to stop firms selling unsuitable products.

Instead, financial advisers must clearly explain to the customer up front how much advice will cost and agree how the customer will pay for it.

A spokeswoman for Yorkshire and Clydesdale banks said: “This decision does not impact on any of the advice our customers have received nor on any policies they hold. We will continue to focus our support for Clydesdale and Yorkshire bank customers across our core retail and business banking strengths.”

A Co-operative spokeswoman said: “The financial planning service has been provided by Axa for a number of years and following their decision to withdraw from this market we will now be considering alternative options.”

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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