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
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.
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......
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.
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)?
It's an underwriters job to decipher fact from, at times, loose disclosure.
I'd be interested to hear more about your experience?
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