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Axa under threat after failing to hit targets

Axa under threat after failing to hit targets

Axa Wealth could fall victim to its failure to hit targets given by French executives to grow its assets under management, a company insider has said.

The insider said chief executive Mike Kellard “saved the business” in 2010 when he was appointed, by proposing the platform strategy which eventually became Elevate.

The French headquarters initially gave Axa Wealth a five-year target of £45bn which was lowered in 2012 to £34bn of assets under management.

In August – and five years since Mr Kellard was appointed as chief executive, Axa Wealth revealed its assets under management had grown by 9 per cent, and reached £28.8bn.

The insider said: “In 2010 Mr Kellard saved Axa Wealth from being shut down by pushing the platform strategy, and the executives in France gave him five years to acquire sufficient assets to generate profits.

“At the beginning of 2013, £34bn is what they were aiming for by the end of 2015 and one would assume that profit target has not been met.”

Hélène Caillet, press officer for the Axa Group, was asked about the targets and figures. She said: “As a general policy, we never comment on any rumour.”

The insider also suggested that it was known across Axa Wealth that the French executives were disciplined, so if a division did not acquire what it set out to acquire, “it would go to plan B”, which could mean the sale of some of the UK businesses.

“Conversations were being had about a sale. Axa is very focused on hitting its profit targets”, the source added.

Last week it was revealed thatBarclays had been appointed to handle the sale of Axa’s UK businesses.

Paris-based Axa Group operates several businesses in the UK, including Axa Wealth, which includes Architas and the platform Axa Elevate; Axa PPP Healthcare; the general insurance division Axa Direct and Partnerships; and Axa Commercial Lines and Personal Intermediary.

The process is not believed to apply to the investment side of the business.

On Monday 1 September, Axa Group announced it was bringing together its pan-European multi-manager businesses into one “hub” under the management of Axa Wealth’s investment arm, Architas.

In total, the hub, with operations in London, Paris and Brussels, will be managed by UK-based Architas chief executive Hans Georgeson. He will be directly responsible for close to €30bn (£22bn) of multi-managed assets, and the sourcing and management of all external fund managers used within the European unit-linked propositions.

Adviser view

Meanwhile, advisers have questioned Axa’s commitment to the UK market, citing regulation and shrinking margins.

Paolo Standerwick, director of Surrey-based MLP, said foreign companies are being put off by the large amount of regulation in the UK.

He said: “We are just over-regulated here, and there are more people doing compliance jobs than there are people doing the job itself.”

Simon Torry, a chartered financial planner with Essex-based SRC Wealth Management, said: “I think it is a combination of two things.