The financial services changeling

The last 18 months has been a waiting game for Aon Australia Group’s (Aon) financial services companies managing director Denis Owens.

Owens, along with Aon’s three financial services companies — Aon Financial Advisor Services,Aon Financial Planning and Protection, and Aon Wealth Management — have been waiting for the right time to begin the largest transition the group has experienced to date.

Under the transition, one of the three Aon businesses will close, and the group’s 250 advisers will have to align themselves with one of the remaining two. The transition also has a looming deadline of January 1, 2004 — less than two months away.

In the face of the massive company restructure, Owens is remaining calm. It has, after all, been a part of the group’s ‘One Aon’ goal.

“About four years ago, with the backing of the global Aon Corporation, we decided as a group, when new CEO Peter Harmer took over, that we would have a very clear focus for the future and that was to protect and enhance client wealth,” he says.

Owen says when Aon’s first financial services company commenced 15 years ago, it was only delivering advice in specialist markets such as life, income protection, and trauma insurances and superannuation. However, he says the group decided it needed to be seen as a lot more than just players in a particular market. It needed to be a company that delivered quality advice to clients across all aspects of risk protection and wealth creation.

“That’s one of the group’s burning desires,” Owens says. “That’s a ‘One Aon’ goal at the moment — to be seen as the distribution marketing company that has successfully brought together all aspects of risk protection — whether that’s life risk or general risk — and combine that with financial planning and wealth creation.”

He says when the Aon Group reaches its goal it will help the Aon name stand a little taller within the financial services pack.

“I think there are plenty of organisations that specialise in risk protection or retirement planning or wealth creation, and there are plenty of companies that specialise in the life insurance arena. But there isn’t one recognised brand that brings it all together and that’s our ‘One Aon’ goal,” Owens says.

Aon Financial Advisor Services will close its doors when the financial services licences come into effect in January. Aon Financial Planning and Protection will have a significant focus on risk insurance, as well as house a number of the group’s authorised representatives. These representatives will offer advice in superannuation and financial planning and the group will have a comprehensive recommended product list.

Aon Wealth Management, on the other hand, is a specialist financial planning company founded by a joint venture with financial services group Ipac. Authorised representatives under this banner will offer planning and wealth creation advice utilising the company’s ‘Advice For Life’ platforms — a branded version ofIpac’s Lifestyle Financial Planning Model.

“Traditionally, our partners in business had been the life offices, where they were the manufacturers and we were the distributors, but what we’ve seen over the last few years is the life office re-enter the distribution game, by opening their own distribution channels, for example,INGwithRetireInvest,MLCwithGarvan, andAXAwithCharter, to name a few,” Owens says.

“To grow our business, we needed to do more than just distribution, so we decided to enter the manufacturing space by developing our own funds management platforms. We looked at the options — acquiring, building from the ground floor up, and partnering. That’s how we came together with Ipac. And after a significant courting process, we decided to establish a joint venture.”

A project is currently underway to roll out Aon Wealth Management’s wealth creation and financial planning capabilities to Aon’s staff of account executives and brokers across Australia.

Owens says another focus for Aon’s financial services companies is to continue actively on the adviser recruitment and acquisition trails.

“We view acquisitions in two lights. We’re happy to investigate opportunities for ourselves, but equally we identify opportunities for our advisers. One of the ways we’ve achieved success in business is that we’re an adviser-focused business.”

Owens says within the Aon groups there is a sound, succession strategy developing. He says a number of Aon advisers have already moved on and sold their businesses to existing Aon advisers, a process that Aon facilitates.

“We bring the parties together and look at the business mix of the parties and see if there are complementary skill sets,” he says.

Part of our success has also been to focus heavily on training and education, which we commenced about three years ago,” Owens says. “We have a clear strategy designed to assist advisers to establish and operate ‘complete advice businesses’ and we achieve this by facilitating advisers’ ongoing education and up-skilling.

“We have also brought many risk-only advisers together with financial planners and created quality joint businesses.”

Vital Statistics: Aon Financial Planning & Protection, Aon Wealth Management

Advisers:250

Funds under advice:Approx. $900 million

Ownership:85% Aon Group; 15% advisers

Location:Nationwide

Founded:2000 (Aon Financial Planning & Protection); 2002 (Aon Wealth Management)

Key figures:Peter Harmer, Aon Group CEO; Denis Owens, financial services companies managing director

Research:In-house, van Eyk

Master trust:Ipac Strategic Super and Investment; Macquarie Wrap; Navigator; Asgard; Summit; BT Wrap

Next conference:August 2004