The company formerly known as The Equitable Cos. is renaming its sales force and moving it towards a fee-based structure in hopes that investors will associate the company with mutual funds and other products rather than just insurance products.
AXA Financial, as The Equitable Cos. is now called, is renaming its captive sales force AXA Advisors, LLC. Previously, the sales force had operated under The Equitable Life Assurance Society of the United States, a subsidiary of The Equitable Cos. All new hires will become fee-based financial planners, while current brokers will have the option to collect commissions or fees, according to Barbara Wilkoc, spokesperson for AXA Financial, which is based in New York.
The company was renamed to change the perception the investing public has about the Equitable name, which is associated mainly with insurance and annuity products sold under the Equitable Life brand, according to AXA officials. Shareholders approved the renaming of the company in May, and the change took effect earlier this month. A television and print advertising campaign has been launched to introduce the AXA Advisors name and new sales concept to the public.
AXA is the parent company of not only Equitable Life but also Alliance Capital Management and Donaldson, Lufkin & Jenrette, both of New York. The company was renamed so that it would be more easily associated with a number of financial products and services - not just those offered by Equitable Life.
AXA advisors are allowed to sell over 900 mutual funds from over 20 fund companies. They also sell Alliance Capital funds and the Winthrop Funds, which are managed by a subsidiary of Donaldson, Lufkin & Jenrette.
"We obviously offer much more than insurance and annuity products. That calls for a name with a broader meaning," said Edward D. Miller, president and chief executive officer of AXA Financial, in a statement.
AXA Advisors, which has a sales force of 7,000 people, is also trying to reposition itself among investors by changing to a fee-based structure. Many brokerages have established fee-based wrap programs in order to allow their sales force flexibility with their clients. They are also able to distance themselves from the perception that their decisions are motivated by the commissions they get from making transactions, according to a report on the registered investment advisor market released by Cerulli Associates of Boston earlier this year.
"Traditional brokerages and insurance companies such as Merrill Lynch and Prudential soon began to formally incorporate the tenets of financial planning into their sales systems," the report said. "As a result, many firms developed mutual fund wrap programs and adopted new monikers for their rep force - renaming them financial planners, advisors, or consultants, rather than transaction-oriented brokers."