The Hartford Financial Services Group Inc. is disbanding its distribution arm, Hartford Life Distributors, and decentralizing its wholesalers among four recently established business units.
The move is part of a major reorganization pledged by chief executive Liam McGee, who joined the firm last fall. As a result of the changes, which were announced in an internal memo, Kevin Connor's position as executive vice president of Hartford Life Distributors has been eliminated, confirmed David Potter, a spokesman for The Hartford.
Under the new structure, Hartford's wholesalers will be split among four business units: mutual funds, individual life, retirement plans and annuities. They will report to the heads of those units, Mr. Potter said.
The realignment of the sales force is an about-face for The Hartford, which in September consolidated all of its distribution under the Hartford Life Distributors name. But having wholesalers sell specific products — instead of all the carrier's investments — makes sense, said Keith Hartstein, president of John Hancock Funds LLC, which uses a similar sales model.
“At various points in the past, firms have tried to have wholesalers sell multiple products and it has never worked,” Mr. Hartstein said. “Clearly delineating the responsibility makes sense.”
The Hartford's director of wealth management, David Levenson, announced the heads of the different business units in an Aug. 19 memo.
Jim Davey, head of the company's retirement division, will run the firm's mutual fund business.
Sharon Ritchey, director of operations, technology and eBusiness for the firm's wealth management division, will head up the retirement plans group.
Rob Arena, director of annuities, mutual funds and Section 529 plans, will head up the global annuity business.
Brian Murphy, executive vice president of individual life, will lead the individual-life business.
The reorganization comes less than two months after Mr. Levenson took over as head of wealth management, replacing John C. Walters.
Mr. McGee has said that he would restructure the dual silo-life and property-casualty structure into three business lines: commercial markets, consumer markets and wealth management.
The new appointments are the latest step in that transition, Mr. Potter said.
Hit hard by the financial meltdown in 2008-09, the company realizes it needs to diversify its business beyond insurance, said Drew Woodbury, an analyst at Morningstar Inc.
“This is a switch from spread-based retirement product toward mutual funds, which are more fee-based,” he said. “I think mutual funds will be a big focus going forward.”
Hartford currently uses its own portfolio managers as well as Wellington Management Co. LLP to advise its funds. But the company has an opportunity to diversify its fund lineup to include more managers and increase its offerings, particularly in the fixed-income, international and emerging-markets areas, said one industry observer, who asked not to be identified.
“Hartford has a good product line, but they probably could use greater internal capabilities to manage more money or possibly introduce additional advisers to the mix,” the observer said.
Mr. Davey declined to comment.
But Wellington has done well for The Hartford, said Katie Ruskewicz, also an analyst at Morningstar. Going forward, The insurer is likely to expand its target date fund lineup and its alternative investment fund offerings as it attempts to grow in the retirement market, she said.
In May, The Hartford launched its Global Real Asset Fund (HRLAX) and Global All Asset Fund (HLAAX). “I expect to see Hartford in the alternative space more,” Ms. Ruskewicz said.
The Hartford's mutual funds had $87 billion in assets as of July 31, according to Morningstar.
E-mail Jessica Toonkel at [email protected].
