So, what’s in store next from the MLC tucker bag.

Fleet of foot or lumbering giant: that is the choice facing the country's biggest distribution networks as they enter a new phase in competition and legislated changes. Stuart Engel asked MLC's recently appointed distribution boss, Steve Tucker, how the group is positioned for the challenges ahead.

Steve Tucker has wasted no time putting his stamp on financial services giant MLC's distribution business. No sooner had he put his feet under the desk vacated late last year by Geoff Austin than he had made his first structural change to the way distribution is managed at MLC, one of Australia's biggest retailers of financial service products.

Tucker decided early on that the group's structure had to reflect the two separate value propositions MLC had to offer. On the one hand, MLC's funds management operation has the objective of building up volumes by bringing more money under management. On the other hand, MLC owns four financial planning groups which each have the objective of selling advice, not product.

Before being promoted to chief executive officer of MLC's distribution business, Tucker was the group's national sales manager. In this position he had the twin responsibilities of maximising sales and servicing MLC's massive financial planning network.

"Previously, the role of the national sales manager was linked to looking after the advisers as well," he says.

"The first thing I did was to separate the function of sales promotion from business development and advice. This was to focus the services provided to intermediaries on the one hand and the quality of advice on the other."

Tucker's replacement as general manager of national sales, Matt Lawler, is more focused on distributing MLC product. The heads of the planning groups focus on delivering services to advisers to promote quality of advice.

Structural changes are not the only issues Tucker has been chewing over during the Christmas break. He has also decided to expand the MLC Private Clients concept, which has been running in Sydney over the past three months, as a pilot project. It will be rolled out in Melbourne this month.

MLC Private Clients is the latest addition to MLC's financial planning network, and its first salaried-adviser group. From a standing start it is slated to grow to more than 100 advisers within 18 months.

The motivation behind developing the group is three-pronged, according to Tucker. Firstly, it will capitalise on MLC's massive database of customers who do not currently get financial advice. Like the big four banks and rivals such as AMP, MLC wants to harness the power of its database and call centres to build the number of clients using MLC advisers.

Secondly, and more importantly according to Tucker, the private client group cam potentially act as a training ground for other more entrepreneurial financial planning roles within the group.

"The industry faces the issue of how we bring new people into it; how we plan succession; how we re-invigorate a system that is starting to mature," he says.

"We've traditionally done it by the traditional career channel and training people up. We've found this is far too expensive. We want to bring people into the business and provide them with quality training. Advisers may spend three or five years in the salaried channel and then progress to an entrepreneurial business by going into one of these other networks."

Finally, the salaried adviser channel is part of a distribution diversification strategy that MLC has aggressively adopted over the past few years.

"Ten years ago, distribution had a real risk, and that was that we had a single distribution channel," Tucker says. At that point, MLC had a traditional life insurance company strategy with inflows dominated by a single tied-distribution channel.

When David Clarke came to the helm of MLC in 1994, the pace of change accelerated. Lend Lease Financial Planning was set up as a network aimed at the high-net-worth end of the market. The group later sold off its building society and general insurance arms to focus on funds management.

Over that time, MLC also concentrated on servicing external financial planning groups. Independent financial planners now make up more than 50 per cent of MLC's retail inflows and MLC funds appear on recommended lists of most financial planning groups and the vast majority of master trusts.

In the past year, efforts to form a true multi-channel distribution group have accelerated further. Last year, MLC launched a web site which has since put the group at the cutting edge of direct distribution via the Internet. The YourProsperity service offers access to the full suite of Lend Lease financial services directly to consumers and is considered one of the most powerful e-commerce initiatives launched so far by an Australian financial services group.

After its initial 33 per cent acquisition of Perth-based master trust Flexiplan, the group took a further third of the business late in 1997 and has helped make it one of the fastest growing master trusts on the market.

Plum Financial Services was also launched last year, just before the break-down of talks between MLC and National Mutual aimed at forming the country's largest financial services group. Plum, a joint venture with US 401(k) and mutual-fund giant Vanguard, aims to bid for the outsourcing of corporate superannuation accounts from the big end of town under superannuation choice of fund legislation.

Garvan Financial Services is also a new addition to the group. It was set up just over a year ago to provide another brand name for MLC advisers, but it operates under the same infrastructure as MLC Financial Planning.

"Garvan/MLC is about re-invigoration. It is about continuing the journey to modernise the network in terms of positioning and the way we provide services for our advisers," Tucker says.

Like MLC Private Clients, Lend Lease Financial Planning is also on a rapid growth path, according to Tucker. He believes the dealer/broker is well placed to benefit from upcoming reforms contained in the CLERP 6 legislation.

The entire MLC financial planning network now boasts more than 1000 advisers under four brand names and three separate strategies, says Tucker.

The diversification strategy begun by Austin, Tucker's predecessor, has certainly paid dividends for the group. MLC is now ranked by researcher ASSIRT as Australia's third-largest retail funds manager, with more than $11 billion in retail funds under management out of MLC's total of $31 billion.

The strategy has also seen MLC consistently form part of the top ten fund managers in net inflows ASSIRT estimates that the group received net inflows of $741 million in the year to September 1998.

But success has not bred complacency, and Tucker says the group is on the look-out for opportunities wherever they arise. He doesn't rule out alliances with the likes of supermarkets and media groups, nor acquisitions of existing financial planning businesses.

"There are always opportunities to grow distribution, which certainly could involve acquisition," Tucker says.

"One thing we have learnt from the success of the banks over the past few years is that we have to be continually changing and adopting new strategies to get it right."