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Fidelity not hiring TOWER's sales force

TOWER will be looking for new roles for just over a third of its life insurance staff once the business is in the hands of Fidelity Life.

Tuesday, May 14th 2013, 6:00AM 11 Comments

by Susan Edmunds

It was announced on Friday that most of TOWER’s life insurance business had been sold to Fidelity for $189 million, as a combination of cash and capital release.

The deal is expected to settle in a couple of months.

TOWER managing director Rob Flannagan said yesterday that Fidelity would be taking only 62 of the life insurance company’s 100 staff. Those who were not being hired by Fidelity were primarily TOWER’s salaried sales force.

Flannagan said TOWER would try to find roles for them in the general business.

He said Fidelity Life’s focus on the independent broker network meant that there was no place for in-house sales staff. TOWER had offered direct life insurance sales, which Fidelity does not.

But the 37 advisers who are part of Tower Financial Advisory Services will transfer to Fidelity Life because their contracts are part of the business. Fidelity chief executive Milton Jennings said it would be his company’s first experience of working with a tied broker force

He said he expected things would be improved for TFAS advisers. They have gone through a series of upheavals as the arms of the TOWER business were sold off.

Fidelity Life’s chief executive Milton Jennings said all of TOWER’s life insurance products would be retired, although some benefits would be absorbed into Fidelity’s offerings.  “There won’t be anything that they were trying to sell before that won’t be in our range.”

Brokers had previously complained that TOWER was not investing enough in developing its life insurance offerings.

Jennings said Fidelity would work on improving its range and would offer brokers more resources and better service and value.

Efforts had been made to take as many staff from TOWER as possible. But he  said Fidelity had a history of working with independent financial advisers and saw no reason to change that. “I think the more narrow the focus, the better you do it. I believe advisers are still a vibrant distribution channel. We’ve always had a culture of dealing through advisers and see no reason to change it.”

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Comments from our readers

On 14 May 2013 at 8:48 am TFAS said:
Great place to find out what is going on.
On 14 May 2013 at 9:21 am Tower Supporter said:
Awesome news!
On 14 May 2013 at 10:43 am Anon said:
So TFAS will become Fidelity's tied agency?
On 14 May 2013 at 4:59 pm Theo Poppodotolus said:
Anon, I have dealt with Fidelity as an independent for many years now, good company. Milton Jennings above clearly reaffirms the long history of working with independents. That and his email release last week reaffirming his strong commitment to supporting non aligned brokers. Brokers is difficult to understand if they intend to also have an aligned channel. An aligned channel would need a reason to be aligned, why would Fidelity marginalise its independent broker network by feeding its own sales force?
On 14 May 2013 at 8:24 pm Doug McQ said:
38 people are going... makes the 8 Partners Life layoffs look small in the grand scheme of things. Funny though how people aren't as outspoken about it.
On 15 May 2013 at 9:57 am Dirty Harry said:
Two different situations Doug. Partners is new, putting on a brave face while attempting to grow. A growing, well capitalised company with strong backing hires as needed, and generally doesn't shed numbers unless things are not working out.

Tower is an established company, that is being bought out by another established company - this is removing duplication and over capacity, - driving the "efficiency" that is often found in M&A. No comparisons are being drawn to PL, and rightly so.
On 15 May 2013 at 12:09 pm really said:
Hi Doug,
I can only hope that if you are an Adviser that your comparisons on products are substantially better than your comparison on staff redundancies between PL and Tower......
On 15 May 2013 at 4:29 pm Zak said:
Every well run takeover assimilates a balance of staff from both organisations to ensure the dual organisations work collectively and in the best interests of all. I suspect that culling the Tower sales team is going to be expensive at many levels not immediately obvious to Fidelity.

In our case we have an agency with Tower primarily because the BDM fought hard to get us and we respect his skill, knowledge and commitment. On the other hand we don't have one with Fidelity because their BDM was pushy and didn't fit our style. So the assumption by Fidelity that Advisers will happily roll into their fold is misguided. There was much about Tower that is good which will be lost when they leave.

Thanks for your hard work and all the best in finding new roles.
On 16 May 2013 at 4:33 pm MJS said:
@ Zak - are you saying that your group chooses not to even contemplate Fidelity's product offering because the BDM in your area annoys you? Do you disclose this in your Adviser Business Statement?

My own experience is the opposite - a good-enough Tower BDM but a shocking underwriting/administration process & systems, including some (in my view) dishonest underwriting behaviour.

Fidelity has a broad range of flexible products, many of them significantly superior to their competitors (particularly Tower). Surely an adviser's duty of care would require that a significant and NZ-owned provider should be at least considered (even if the BDM is annoying)?
On 17 May 2013 at 4:28 pm Interested said:
@Zak - what exactly is dishonest Underwriting Behavour? IMO Underwriters aren't at liberty to tamper with "fact".

It's an underwriters job to decipher fact from, at times, loose disclosure.

I'd be interested to hear more about your experience?
On 17 May 2013 at 4:31 pm Interested said:
Apologies Zak, my comment is directed to MJS.

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