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AXA pulls out cheque book

AXA is keen to buy financial planning businesses but its boss, Ross McEwan, is critical of production criteria put on firms.

Wednesday, July 11th 2001, 9:22PM

by Philip Macalister

AXA has made its interest in acquiring distribution clear by helping Wellington-based advisory firm Cameron Chote buy the financial planning business of KPMG.

Details of the deal are being kept under wraps. However, AXA boss Ross McEwan describes it as a joint venture where the KPMG business is jointly owned by Cameron Chote and AXA.

The existing Cameron Chote business, which is more focused on risk and superannuation, is being kept separate from the joint venture.

As part of the deal Cameron Chote picks up two highly experienced CFP qualified advisers Denyse Macindoe and Jag Jagadish.

KPMG also employed a para-planner and a part-time administration person.

McEwan says that Cameron Chote has no production criteria placed on it.

He is critical of other fund managers who require that a certain percent of business has to be put into its funds.

"We do not dictate product volumes or that our products should be sold," he says. "There is no arrangement which guarantees us business."

"A financial planning firm's independence is very important," McEwan says. "It's not necessarily so important in the risk side of the business."

McEwan's view is that a manager can influence, but not dictate which funds are sold.

"We don't believe that any company in the investment side (of the industry) can dominate the investment market."

AXA is currently on the hunt for more deals in the distribution area. Underlying this expansion are two key points.

Firstly AXA wants to help financial planning firms grow. To this end it has established an executive grouping which is headed by Kevin McLean and charged with supporting financial planners.

McEwan says the Cameron Chote deal "was a great opportunity to assist a very large agency to diversify with our support."

Secondly, any deal has to be profitable for AXA. In the past big companies have had relationships with advisers based on production, not profitability.

McEwan says profitability is important to AXA in these arrangements.

"Our strategy is really to help financial planning firms to grow," he says.

AXA are planning to roll out several new funds in August. These are understood to be sector specific funds from Alliance Capital, but they will not be tax driven.

You can read Philip's blog here: http://www.goodreturns.co.nz/blog/

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