Mr Miller's review concluded that sales and marketing should become the responsibility of one manager. M&G decided that Mr Miller was not up to taking on the enlarged role.
Paddy Linaker, M&G's managing director, said: 'Tim has really been responsible for advertising and direct mail, but not for our sales, nor for our branch network and team of consultants. We did not think he had the experience to do it. He was not the right man to take responsibility for carrying on that wider role.'
Mr Miller's replacement will be Peter Emms, who until April was executive director, marketing, at Allied Dunbar, the life insurance and pensions company. Mr Emms will join M&G in three weeks as sales and marketing director.
Mr Linaker said Mr Emms was expected to join M&G's main board in the next year or so.
Before his 13 years with Allied Dunbar, Mr Emms was a broker consultant with Phoenix Assurance.
Mr Miller said he was surprised and disappointed at being asked to leave. He considered that his four years at M&G had been successful, with 'one or two minor triumphs' - such as raising pounds 61m with the European Dividend fund, pounds 246m with the M&G Income investment trust and pounds 130m with M&G Recovery. Income and Recovery were the two largest investment trust launches.
Friends of Mr Miller suggest that M&G did not regard him as a team-player.
He had previously run Framlington, another investment group, and was used to taking decisions without wide consultation.
His compensation is rumoured to be pounds 150,000 plus his company car.
Mr Miller, 51, is not sure what he is going to do next. 'I hope it's something really significant,' he said. 'It's quite a cool place out there (in the job market).'