Speaking at a media briefing following release of the group’s half-year financial results yesterday, Suncorp Group chief executive Michael Cameron said the decision to walk away from the management of the two dealer groups has represented a “very smooth” transition, further pointing out that the advice businesses were not a large part of the company.
“It is very difficult sometimes for an organisation with their own products to own a company that has the perception of being independent,” Mr Cameron explained.
“You really have to question, in any organisation, having those sorts of dealer groups on board.”
Mr Cameron added he did not believe the exiting of the advice businesses will “hurt” future earnings.
“We have seen a fairly seamless transition as we have exited that business, and the majority of the planners associated with that business have moved on to new financial planning organisations,” he said.
“Probably the most important thing is what has happened to the customers and they have continued to be well-serviced and without any issues.
“Our focus is really on the direct channel [in] which we have seen significant growth of about 20 per cent period-on-period, and that seems to be where the interest is from a customer perspective and I think we have executed that process in a very diligent way,” Mr Cameron added.
During the group’s half-year financial results announcement, Suncorp Group reported a net profit after tax of $530 million, down 16 per cent on the previous corresponding period.
Across the group’s life insurance business, Suncorp reported a net profit of $53 million, down from $86 million in the previous corresponding period.
[quote name=”Mark A. Harris”]It is a sad day, I was one of the original Guardian Advisers [ but left soon after Suncorp took over] and have been a supporter of Royal & Sun Alliance [ Asteron ] for over 25 years, but the beginning of the end was the day Suncorp took them over as well. Banks have no idea how the insurance industry works and through their reign of terror we have seen good companies, advisers and licensees disappear. All I can say is – I warned you all this was going to happen in 2008 when I left.[/quote]
Mark, as a ex Royal & Sun Alliance and ex Asteron employee, as well as later a ex Suncorp Life contractor, I find it hard to see what the company did for increasing Superannuation new business. there was no General Manager of Distribution for some time. Investment business was not considered post 2002, after the ill fated Investor Direct Portfolio Service adventure failed.
The next adventure for Suncorp life is the captured clients product, also known as the direct product.
Kind regards,
Adrian Totolos.
Business Analyst.
It is a sad day, I was one of the original Guardian Advisers [ but left soon after Suncorp took over] and have been a supporter of Royal & Sun Alliance [ Asteron ] for over 25 years, but the beginning of the end was the day Suncorp took them over as well. Banks have no idea how the insurance industry works and through their reign of terror we have seen good companies, advisers and licensees disappear. All I can say is – I warned you all this was going to happen in 2008 when I left.
[quote name=”Joe”]The owner of the licensee, who allowed the issues and some would argue substandard products and advice, ditches the advisers and walks away? As employers we would be charged with unfair dismissal if we handled employees that way.
Mind you, generally speaking, if substandard advisers are forced out of the industry by unprofitable licensees closing down and other dealer groups not wanting to take them on, it may be harsh but perhaps the industry is better off.[/quote]
Agree Joe.
Kind regards,
Adrian Totolos.
Business Analyst.
The owner of the licensee, who allowed the issues and some would argue substandard products and advice, ditches the advisers and walks away? As employers we would be charged with unfair dismissal if we handled employees that way.
Mind you, generally speaking, if substandard advisers are forced out of the industry by unprofitable licensees closing down and other dealer groups not wanting to take them on, it may be harsh but perhaps the industry is better off.
The new direction is a typical banker approach to Life Insurance and it appears these guys have learnt nothing from the MLC disaster. Looking forward to the collapse of Asteron and a new CEO in the short term. Sub standard product and delusional people who think the market is flat earth. Nothing to do with FOFA just dumb bankers.
So are these comments an admission that Suncorp is progressively winding down Asteron?
It will always be difficult for a product manufacturer with sub-standard product to run a perceived independent dealer group. Particularly in a FOFA world where best interests means it is appears even more difficult to justify the sub-standard product. So you end up with your own advisers recommending the competition and, unfortunately for them, a group like Suncorp can’t survive on adviser fees alone.
What’s the next step? sell sub-standard product direct to consumer which should work well for Suncorp because it will be under general advice and who looks after the consumer then? Obviously not an adviser
The Life Company result was a disappointment from previous years.
The known issues in the distribution area has caused much pain in the company.
Some areas of the Life Company business looks to have moved from Kent Street, Sydney to Queensland.
Regards,
Adrian Totolos
Business Consultant.
Gotta disagree with you there, Ben.
The old way of advisers buying a book and receiving commission/tacking on an adviser fee is dead… And for good reason.
Post FOFA advisers that add benefit to their clients year on year are as profitable as ever and opt in isn’t a hurdle either.
While I would prefer advisers to be totaly independent of product providers, I think it is a concern that a large dealer group can’t see a profitable future and closed down. Other dealer groups must also believe there is little value left in financial planning or they would have bought the business. Worse still, they are looking to bypass advisers altogether and deal with consumers direct. The negative outcome of FOFA, which many of us feared, is now playing out before our eyes.
Pretty ordinary the way the co. is so dismissive of the local advice businesses so much a part of small QLD communities for so many years.I’m sure they’ll have a ball with their highly persistent direct life book into the future……
20% growth period on period from the direct channel and exiting advice businesses will not hurt earnings ?
Both are delusional comments.