Competition to contract as Axa set to close its investment arm
INSURANCE group Axa is to shut its investment arm Axa Financial in a move brokers say will lessen competition in the market.
The move comes as a survey shows that charges on tracker bond investments range from 7.25pc to 2.5pc, prompting analysts to conclude that some of these products are poor value.
Axa Financial (Ireland) said it was closing for new business with immediate effect. It will continue to provide its investment research service until the end of July.
Those with investments through the company will continue to have them administered.
The firm added that it would abolish all penalties for those surrendering products.
Broker Liam Ferguson of Ferguson and Associates said Axa had been offering some of the better products and funds in the market, and had pitched its offerings at the more savvy investor.
The company operated through brokers but had encouraged brokers to "educate clients about smarter ways to invest".
"It avoided selling tracker bonds, unlike banks. There are very few tracker bonds I would actually recommend to clients," Mr Ferguson said.
Research by Vincent Digby of Direct Investments found that tracker bonds have total fees as high as 7.25pc.
A tracker bond is a fixed-term investment where most of your money is invested in a deposit-based account and the rest is invested in the stock market.
It is a requirement of the Consumer Protection Code that all charges are disclosed.
Meanwhile, Sandyford-based Mondial Assistance Ireland remained profitable last year as turnover at its parent company Allianz Global Assistance broke through the €2bn mark for the first time in its history.
Roland Hesse, country manager with Mondial Assistance Ireland, confirmed the local operation's enduring profitability and said it had been achieved "despite the ongoing economic challenges".
Mondial provides "travel insurance, assistance and personal services", encompassing everything from dealing with lost luggage to helping clients out when their "vehicle has broken down in the desert".
At group level, Allianz Global Assistance's roadside business grew 10.5pc last year despite the economic climate in Europe, which they said "greatly impacted" the market there.