CompaniesNov 27 2014

Paraplanners to lose roles in post-Oval restructure

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A comprehensive restructure of Arthur J Gallagher’s UK arm, which since April has included the former Oval Financial Services business, will see a number of redundancies and a “reduced headcount” of paraplanners.

According to documents seen by FTAdviser and circulated among employees, support staff will be merged into five centralised ‘service centres’ and the business will be streamlined around two core functions, dealing with individual client wealth management and corporate pensions advice.

The five service centres will be based in Birmingham, Chelmsford, Guildford, Market Drayton and Nottingham.

The restructure documents detailed that there will be a number of redundancies and a reduced number of paraplanners, although the consultation is ongoing and numbers remain unconfirmed.

A ‘timeline’ document revealed that all roles across affected offices, including the senior and operational management, are covered and many have explored “alternative” roles. Consultants have also met with senior management to discuss their ‘alignment’ to specialism.

The company’s dedicated annuities desk will be scrapped, with all advisers in the new wealth management arm giving ‘at-retirement’ advice.

Lead development executives, T&C supervisors, client support in Glasgow, Leeds, Huddersfield, Liverpool and Milton Keynes, and secretarial and operational support, have also met with management and human resources to discuss the impact of the restructure on their roles.

Elsewhere, Angela Ward, Oval managing director, and Gill Millen, a regional director, have become the latest senior Oval figures to resign from the business.

Ms Ward and Ms Millen follow in the footsteps of Peter Blanc, Oval’s former chief executive and head of Gallagher’s UK retail division, and Peter Osborne, Oval’s financial services investment director, who resigned earlier this year.

An AJG spokesperson said: “A number of senior Oval people have resigned, and are leaving of their own volition. The vast majority of Oval team members are staying onboard.

“Clearly when a business acquires a number of companies in quick succession, duplication of roles can become apparent - and we are looking to redress that issue with a small number of redundancies.”

US-based employee benefits giant AJG acquired insurance broking and wealth management specialist this April in a deal worth £199m.

Previously, Tim Johnson, the UK chief executive, told FTAdviser that AJG is in an “integration phase”, with Oval and confirmed a consultation should be completed in May. Mr Johnson had confirmed office closures and redundancies would take place to ensure roles are not duplicated.

He also revealed to FTAdviser that a number of former advisers with the Oval Group had been hit with legal action for allegedly breaching non-compete and non-solicitation clauses.

Speaking about the new revelations, Mr Johnson said: “The landscape has changed post RDR and auto-enrolment, and the buyers of our services are increasingly sophisticated and empowered.

“Not everyone readily buys into change, but we’re set on reshaping our business to match those client requirements, with an ongoing focus on professionalism and commercial awareness.”

From the restructure updates it appears that advice will be split between wealth creation and wealth management, which bosses hope will focus the firm on the “business and client needs rather than local or individual consultants available”.

Consultation Q&A documents circulated to staff revealed adviser concerns that clients will be pigeon-holed. Those advisers that have a client bank mix of corporate services and wealth management were also said to be concerned about ongoing client and consultant relationships.

AJG responded that existing client relationships will be “considered” to avoid any impact on client loss. It noted: “The process is about maintaining relationships with clients and working efficiently as a team to provide a valuable and profitable service.”

One consultant within the restructure update labelled central management “naïve to think there won’t be potential client losses”.

donia.o’loughlin@ft.com