AMP/AXA would create NZ advisory giant

A joint AMP/AXA business would claim an owned or aligned advisory force of almost 800 in New Zealand with AMP contributing 380 advisers and 398 under the AXA banner.

By comparison, the Sovereign risk adviser chain SovNet, currently the largest aligned advisory network is understood to number about 450.

While the majority of advisers in a combined AMP/AXA business would be classed primarily as risk specialists, roughly 60 investment advisers sit in the AXA-owned Spicers firm.

AXA also recently launched the AdviceFirst group, which claimed 33 advisers operating under its auspices. As well, AXA supplies multi-manager investment services to a number of other groups including New Zealand Financial Planning.

Unlike its Australian counterpart, AMP New Zealand does not own any ‘third-party' advisory groups, however, it bought the mortgage-broking network Roost in 2007.

AMP also said a merger with AXA would give the business access to 1,000 independent financial advisers.

In a statement heralding the A$11 billion offer for AXA Pacific, AMP chief executive, Craig Dunn, said the combined entity would "create a new force in Australian and New Zealand financial services, with financial advice at its heart".

The deal values the New Zealand and Australia assets of AXA Asia Pacific at A$4 billion with the firm's Asian assets to end up in the hands of AXA's parent French company if the merger proceeded.

Ralph Stewart, head of AXA NZ, said he was not able to make any comment on the potential fate of the group's advisory networks until talks between the two parties were concluded.

AXA rejected the initial offer earlier this week, however, Stewart said negotiations were continuing.

Yesterday, Standard & Poors lowered its long-term counterparty credit and insurer financial strength ratings for AXA Australia and AXA New Zealand from AA to A+ as a result of the proposed merger.

Comments from our readers

On 13 November 2009 at 11:17 am Bruce Puddle said:

AMP is dreaming if they imagine that just by purchasing AXA they would automatically get the 398 AXA Advisors rushing forward to also sell AMP risk products. They don't seem to realise that AXA advisors are not 'tied' Advisors in the way I understand some AMP advisors are.
AXA Advisors are allowed to recommend and place business with other companies. The other major issue AMP seems to be forgetting is that their risk products are most times significantly more expensive than AXA's (and many other companies as well) and some do not have as good built in benefits . I recently saved a couple (in their early forties) $24 monthly by rewriting their $430K AMP life cover with AXA - that's a substantial saving. Plus AXA's 'Level Premium' Income Protection policy is VASTLY cheaper (for those below 55) over the medium to long term than AMP and any other company as well for that matter.
Why on earth would any honest, professional Advisor ever want to recommend a much more expensive AMP risk product when there are equally or better featured and much cheaper products available. To do so would be blatantly dishonest.
The only benefit I see that might happen is that AMP could be forced to have to drastically lower the premiums of their core risk products to become competitive with AXA and other companies. Then and only then, would I and other AXA Advisors be willing to recommend an AMP risk product.
AMP needs to face the fact that their current exorbitant premiums makes the recommending of their risk products
impossible for any Advisor who wants to do an honest and professional job.

AMP/AXA would create NZ advisory giant

The proposed merger of AMP and AXA would create New Zealand’s largest tied financial advisory force by far, according to figures included in the AMP offer document.

Wednesday, November 11th 2009, 5:18AM 1 Comment

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