Equitable Life Faces Mass Defection of Top Salesforce Amid Sale Plans

Strategic Insights -

Equitable Life, a struggling life insurer, is facing a potential exodus of its highly valued salesforce, threatening its plans to sell off profitable parts of the business. The company has been in talks with at least two firms of independent financial advisers (IFAs) to persuade teams of salesmen to leave en masse. In a bid to retain its salesforce, Equitable Life had previously offered a £10 million retention package, worth an average of £25,000 per person, but the deal may not be enough to prevent a mass defection. The salesforce is expected to be enticed away in February, after receiving bonuses guaranteed under the original retention package.

Key Takeaways:

  • Equitable Life faces a potential mass defection of its top salesforce, threatening its plans to sell off profitable parts of the business.
  • The company has been in talks with at least two IFAs, Bankhall and Inter-Alliance, to persuade teams of salesmen to leave en masse.
  • Equitable Life offered a £10 million retention package, worth an average of £25,000 per person, in an attempt to retain its salesforce.
  • The salesforce is expected to be enticed away in February, after receiving bonuses guaranteed under the original retention package.
  • Bankhall and Inter-Alliance specialize in converting salesmen working for life insurers into IFAs.
  • Equitable Life has been trying to sell off parts of its business to raise money, including its fund management operation.
  • A number of companies, including Prudential, are believed to be interested in taking the salesforce on as part of the sale.
  • Inter-Alliance is planning to open an online individual savings account and fund supermarket through BT's btopenworld website.

Statistics:

  • £10 million: The value of the retention package offered to Equitable's salesforce.
  • £25,000: The average value of the retention package per person.
  • 1,350: The number of Inter-Alliance's advisers.
  • 800,000: The number of BT's btopenworld website users.
  • £1.5 billion: The estimated hole in Equitable Life's finances due to a House of Lords ruling.
  • February: The expected date for the mass defection of the salesforce.

Sources:

  • The Times, 2001, "Equitable Life faces mass defection of top salesforce amid sale plans".