National Mutual’s rebranding as AXA has been highly successful and the revamped company is now poised for growth, according to New Zea-land chief executive Ross McEwan.
National Mutual’s rebranding as AXA has been highly successful and the revamped company is now poised for growth, according to New Zea-land chief executive Ross McEwan.
National Mutual took on the name of its majority owner, the French insurance giant AXA, in August this year but the company has been re-structuring for about a year.
McEwan says the changes are “all but complete” with the target sav-ings in management costs of 35 per cent almost achieved.
“Staff levels have been reduced by about 20 per cent but most of these reductions have been by natural attrition. However, there have been some redundancies,” McEwan says.
He says savings have also been achieved by rationalising structures and processes of the three core areas of AXA’s business.
“We now share a lot of the services, such as financial, IT and legal services, between the funds management, risk and lending side of the business,” McEwan says.
Link ups with AXA in Australia have also enabled the New Zealand business to operate more efficiently.
“Most of our back office systems are also run out of AXA Australia but New Zealand remains an autonomous business entity,” McEwan says.
“Where there are similarities we will work together with Australia, and where there aren’t we’ll go it alone.”
He says the halving of its on-sale investment products, from 30 to 16, has also positioned AXA well for future growth in the managed funds industry.
“The product range hadn’t been reviewed for 13 years, so some of the products were no longer suited to the current environment,” McEwan says.
While the industry is rife with merger and acquisition activity, McE-wan says most of AXA’s growth will be organic with particular oppor-tunities in the master trust market and in the development of income protection products.
He says while National Mutual is primarily perceived as an insurance company, the rebranding as AXA will lift its profile as a provider of complete financial services.
“It hasn’t been long since the name change but the feedback from the marketplace has been very good,” McEwan says.
“As products are starting to look the same a global brand name is be-coming more important.”
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The groundwork for the establishment of a degree course in financial planning and risk management has been laid in the just released Fi-nancial Planners and Investment Advisers Association (FPIA) education review.
Professional development director for the FPIA, Paul O’Brien, says a Bachelor of Business Studies (BBS) with a major in financial planning and/or risk management may become a university approved course in as little as two years.
He says the course would be run by Massey University which currently administers the financial planning diploma qualification.
The FPIA board has ratified the education review, produced in asso-ciation with Adviserlink and authored by Merv Chan, which also estab-lishes a new life and risk diploma in addition to the existing finan-cial planning diploma.
Massey University will run the diploma courses both external and at its Auckland, Wellington and Palmerston North campuses with enroll-ments for the first semester of 2000 expected to begin soon.
O’Brien says the education review has determined the education track for FPIA members for the next three to seven years.
“The FPIA has decided to adopt the education review as a blueprint for future adviser training both for existing members and for new colleagues in the industry,” O’Brien says.
He says the diplomas and/or degree course may attract much needed new blood into the aging membership of the advisory industry.
“There is a large demand for these qualifications which is being driven by the mentors in the industry who are belatedly thinking about succession planning,” O’Brien says.
“A number of advisers have indicated they would sponsor bursaries for school leavers wishing to pursue these studies.”
While it was not a feature of the review, O’Brien says he would like to see an “industry education treaty” between fund managers, life of-fices, advisers and all interested parties that supports the educa-tion format set by the FPIA.
Meanwhile the FPIA has floated its own response to proposals advisers should be registered.
FPIA co-president David Milner says a system where only members of a professional organisation are able to sell fund manager and life of-fice products is more effective than registration.
He says the FPIA is ideal for this role because it is the only appro-priate organisation with a rigorous code of ethics, ongoing educa-tional standards and an independent disciplinary procedure.
“Anyway, the problem in New Zealand is not really one of malpractice but more of bad advice due to lack of education and training,” Milner says.
He says the FPIA has approached the investment industry for funding to resurrect the now defunct Insurance and Investment Advisers Asso-ciation (IIAA) Development Trust to assist with education and train-ing standards.
High profile investment adviser Murray Weatherston, says fund manager should support the Development Fund as a reward for the merger of the IIAA and the former Investment Advisers and Financial Planners Asso-ciation (IAFP).
“As I understand it fund managers seeking to cut the costs of sup-porting two organisations were driving the merger. The FPIA should now get a little quid for their quo,” Weatherston says.
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Tower Trust has formed an alliance with the world’s largest supplier of investment management software in an attempt to tap into the grow-ing demand for the outsourcing of corporate back office services.
The deal with DST International has created Tower Trust Fund Services which aims to be New Zealand’s leading supplier of outsourced back office services.
General manager of Tower Trust Fund Services, Mark Paterson, says the alliance offers a unique opportunity for institutional investors to outsource the increasingly complex back office tasks.
“Until now New Zealand investment institutions could choose to do their back office work themselves or use their Australian parent com-pany systems. Tower Trust Fund Services will now offer the very best in such services right here, utilising our local specialist knowl-edge,” Paterson says.
“This will not only see New Zealand investors and institutions able to access a world class level of service but will also preserve local employment opportunities and generate economic activity.”
He says talks are already underway with several “large players” in-terested in utilising the new service.
DST International is the world’s leading provider of software for the investment management and managed funds market and its US parent, DST Systems is the largest provider of outsourced fund and investment services in the US.
Paterson says the majority of Tower Trust’s major clients and poten-tial clients already use DST software.
