Tech Review: Axa Elevate

AT8's Mark Loosmore investigates how AXA Wealth’s Elevate platform has successfully set out its stall to align itself to the IFAs’ perspective.

Last week, we reviewed Nucleus and made much of its IFA ownership, so this week we turned to AXA Wealth’s Elevate platform to see how a provider-owned platform stacks up.

The contrast is not as great as might be expected, because AXA treated the Elevate business as a separate ‘start-up’ entity from day one, enabling it to grow its own culture and its own set of rules.

We met Martin Jennings, AXA Elevate’s managing director, who likened the approach to Microsoft’s launch of the XBox. Previously, Microsoft had entered the gaming market and failed to gain any traction: the culture was wrong, the programming approach was different and the marketing style was unrecognisable to the core Microsoft team. When Microsoft launched the XBox, it was set up as a separate entity with its own personnel and culture. In doing so, Microsoft created a huge hit.

A different approach

AXA has gone down a similar route, and the Elevate team certainly has a different feel to many traditional product providers. Its lack of legacy has meant it hasn’t needed to have the same focus on administration, and has concentrated on looking at life from the outside, trying to align itself closer to the IFA perspective. However, it would be wrong to say it has fully shed the clothing of a product provider. Many of the personnel have come from a provider background, and you can still see some of the ‘big company’ philosophy in the build of the platform.

While discussing the ownership of Elevate, it is worth establishing the position of AXA Wealth in the industry following the recent Resolution deal. For many years AXA positioned itself as what many in the industry described as a waterfront financial provider: covering every aspect of financial provision from pensions to protection and from personal investments to corporate insurance.

While this had appeal in theory, the reality was that a lack of focus meant the investment was split across all lines of business and focused on mandatory changes in products and systems, often preventing ‘thought leadership’ and market defining strategies.

Last year AXA decided to focus on the wealth market, and the remaining assets were sold to Resolution Life. The resulting company was AXA Wealth, consisting of what was Winterthur Life, AXA Elevate, AXA Wealth International and AXA Architas (its multi-manager investment proposition), plus the Bancassurance business and Sun Life Direct.

Motivation to succeed

Some have accused AXA of moving its focus from the UK as a result of this move. However, we believe it gives AXA the investment motivation needed to succeed in the market. AXA worldwide enters a market only if it can become a top-three player, although this is likely to be measured on new business inflows  rather than Assets Under Administration (AUA).

Its investment in Elevate certainly signals this intent. It has driven the proposition hard in 2010, signing up 900 firms, tripling its user base on the previous year. The last published figures had them with AUA of £1.6bn, but with the improving market and increased user base we suspect this would now be north of the £2m mark.

While the growth is commendable for having 900 firms signed up, this is still quite low. The challenge is now to get all of the firms actively using the solution, which generally takes at least six months. AXA is now focusing its resources on speeding up this adoption. To enable the change is where the spending power of an organisation such as AXA comes into its own. AXA and Winterthur always had a strong team of business consultants to drive up adoption of their solutions. The combined team is staffed by experienced consultants. It is set to grow further this year, with substantial recruitment plans scheduled.

The team has created a set of service propositions. These include business audit/health check, a proposition development toolkit, a due diligence kit, client and asset migration toolkit, and online business support to help with issues such as marketing. Such products and their implementation support clearly differentiate Elevate from many of its competitors.

One IFA that has used these services to good effect is Phil Smith, director of PHFS Wealth Management. He says he has worked with the AXA business consultants to drive efficiencies and to gain him more time to make sure his firm is RDR-ready. He says he now has “a quality client proposition that offers real value to our clients and is priced accordingly”.

Another key strength that the financial backing of AXA provides is that it pre-funds switching and buy/sell trades so that it can speed up and smooth the process for advisers and customers. While the FSA is to require platforms to adopt ‘transparent’ pricing from the end of 2012, AXA decided to offer both ‘explicit’ (unbundled) and ‘ composite’ (bundled) pricing options. The appeal of each can depend on the IFA business model, or the preferences of their individual clients.

A modern, clean solution

The platform software itself is a nicely presented solution, modern and clean in its branding. The usability is good, although clearly aimed at the IFA market and not streamlined for a consumer to interact with (something that some IFAs will view positively).

The home page has a good management dashboard that provides a breakdown of the firm’s or adviser’s business to show a summary by asset, client, product wrapper or asset class. The dashboard also shows recent activity and a list of fund alerts that could either have been selected and set up at firm or adviser level. The presentation of the dashboard is effective and gives an excellent summary for the user.

Elevate contains all the main functions that you would expect from a platform, providing clear views, drill-down capability, summaries and reporting on an individual client and their investments to support the advice process. The advice process includes an online and offline psychometric risk questionnaire and a risk-rating tool, which supports the establishment of a suggested risk rating, supplies a risk description and maps to a range of optimised asset allocation models.

AXA has reached an agreement with Voyant to allow its users to carry out lifetime cashflow modelling to demonstrate the impacts on their goals. The Voyant tool is one of the most engaging cashflow planning tools on the market. The integration between the tools and the platform is currently manual, but the combination of these tools together is powerful.

Strong corporate backing

Client access to the platform is read-only at the moment. The display the consumer sees is certainly valuable, but we would like to see the ability for an IFA to add the ability to amend/update information trade if desired.

The platform is a credible solution and has scored well in many external surveys, but we return to its corporate position to define its relevance. Elevate is backed by one of the largest insurance companies in the world. It has strived to bring the benefits of its scale to its clients: stability, investment, funding, support and infrastructure.

So far it has managed to operate without some of the corporate constraints on innovation that can come from being part of a large company. The signs are it is doing well through these tactics. Deals such as the one with Sesame, where Elevate has been selected as the lead platform promise a great deal. The challenge is now to convert firms that have signed up to use the platform to produce tangible AUA.