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Prudential has appointed Harvey McGrath, former chairman of the Man Group, as its new chairman, succeeding Sir David Clementi.

Mr McGrath will join the Prudential board as a non-executive director on 1 September, becoming chairman on 1 January 2009. His annual salary will be £500,000, fixed for three years.

Mr McGrath joined Man Group as treasurer in 1980, and became president of Man Inc in New York before his appointment as chief executive in 1990. He left the group last year. He started his career at Chase Manhattan Bank in London and New York.

Mr McGrath is also chairman of the London Development Agency and vice-chairman of the London Skills and Employment Board. He is a former chairman of London First, the business association dedicated to attracting employers to the capital, and a member of the International Advisory Board of the School of Oriental and African Studies.

Mr McGrath said: "The financial performance of the company over the past three years has been strong and differentiated from its competitors by its broad geographic reach particularly its exposure to Asia, product expertise and the strength of the leadership team."

Alan Smith, managing director of London-based IFA Capital Asset Management, said: "Despite its size, the Prudential never seems to have cracked the IFA market in any meaningful way, compared with Standard Life and Norwich Union. Its strategy has been confusing in terms of what it is and what it offers and it has not got close to leading IFA companies."

"We rarely use it. In the modern world, with the move towards fee-based wealth management using platforms, Prudential has to be either a first-class platform provider or a manager of first-class investment funds, and it does not seem to be either."