Friday 26th of November 2010

It must be tough at AXA. It’s been year a long courtship (with little love or passion) and now its the regulators who have decided AMP is a better suitor for the business, not BNZ’s parent NAB. (I always thought parents were meant to sort out arranged marriages not the authorities). Trying to make sense of this long-going affair is difficult, but here’s my take on it. There seems to be some logic in AMP wanting AXA in Australia, however the desire to own AXA in New Zealand is less obvious. Our talks with lots of people suggest NAB (BNZ) would be a better option and that there would be cultural and personnel clashes. Considering both organisations are strong in the life insurance area it’s worth thinking about what happens there. AMP runs pretty much a tied distribution force, while AXA let it’s guys loose years ago. They, I assume, could have dealt with AMP if they wanted, but have chosen not to. Therefore it seems unlikely these advisers will look to be AMP men in the future as they have already said no to the company. Instead they will look to work with other life companies if the deal proceeds. And just to add another interesting layer to the adviser side of the equation we are hearing stories that AMP advisers are unhappy with some of the manager management in the company, and are voting against various parties in that organisation, including one who was involved with AXA and its funds management acquisition. I reckon the best solution is that there is a management buyout of AXA in New Zealand. Maybe the team there can do some sort of deal with organisations like the NZ Super Fund or Lloyd Morrison to get out of the takeover and remain as a competitor in the market. No doubt AMP wouldn’t be adverse to a bit of quick cash when the deal is done to allow it to focus on the Australian assets. It means we get another New Zealand owned financial services company and advisers don’t lose of the of choice they have in the market at the moment. That means we keep one of the carriers and it is one which is independent of these big organisations/