CompaniesJun 1 2016

‘Large chunk’ of Axa Wealth to close to new business

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‘Large chunk’ of Axa Wealth to close to new business

A large part of Axa Wealth will close to new customers when the deal with Phoenix Group is complete, the closed life book consolidator’s head of life has confirmed.

Last week, Phoenix announced it had agreed to buy French insurer Axa’s UK operations, including Axa Wealth and SunLife, for £375m.

Speaking to Financial Adviser, chief executive of Phoenix Life Andy Moss said a “large chunk” of the Axa Wealth business will no longer accept new customers once the deal is completed.

Phoenix said it would continue to service existing policyholders so Axa products can be “left as they are”, he said.

“When we have closed the life and pensions business [Axa Wealth] to new customers, we will consolidate that business into Phoenix. We will then look to deploy our operating model for the closed book business across [Axa Wealth].”

The Sun Life brand and products, however, will remain intact and stay open for new business, according to Mr Moss.

Niche products, such as Axa Wealth’s corporate trustee investment plan, will also remain open for new customers, but will be rebranded with the Phoenix name, he added.

Mr Moss was keen to assure advisers and their clients in the near future it will be business as usual with Axa Wealth and Sun Life.

“There will be a period of time where people will continue to see exactly the same business as it is,” he said.

“I would stress it is very important to us that we continue to look after the existing customers and continue to provide the features and terms and conditions which are offered as part of those products.”

However, Phoenix would only know the details of how the integration of the two businesses will work when the deal is complete, he added.

Phoenix will continue to work with Axa’s investment management provider Architas, Mr Moss said, which is excluded from Axa’s UK sell-off plans.

However, he suggested the takeover could result in redundancies as Axa’s financial and actuarial functions in Basingstoke migrate “over time” to Phoenix’s base in Wythall, Worcestershire.

“We would anticipate there will be fewer roles in Wythall needed to run the overall business,” he said, adding however he couldn’t be specific on the number of jobs that would be cut at this point in time.

But Mr Moss said Phoenix plans to hold on to Axa’s Basingstoke office for its customer services and IT operations.

The closed life book consolidator also has a “strong preference” for Axa Wealth to continue to operate in Basingstoke as it does today, but under the management of an outsourcer, Mr Moss said.

Pointing to previous acquisitions where outsourcing sites have been created, he said the firm’s past experience is to “pretty much take the teams intact”.

“We would anticipate there will be less roles in Wythall needed to run the overall business.” Andy Moss

The sale of Axa Wealth and Sun Life to Phoenix followed the sale of Axa Elevate to Standard Life at the start of May.

Following the announcement of Axa’s deal with Phoenix, Marlene Outrim, managing director and financial planner at Uniq Family Wealth, said: “My concerns would be about the service Phoenix can give to clients who now have to deal with new systems and a name they probably have never heard of.

“I wonder what Phoenix’s long-term aim is for the company and whether it is to build itself to be big enough to sell. It is already made up of a number of acquired businesses, like NPI, Pearl and Guardian.

“I would be concerned for the IFA community, as Axa Wealth has always served us well.

“The support to IFAs has been one of its stronger points. Clearly there will be relocations and redundancies, but that is inevitable with any sale.”

katherine.denham@ft.com