AMP flags reshaping advice network
AMP Limited has reflected the full impacts of recent Royal Commission and other events reporting a significant decline in statutory net profit of just $28 million down from $848 million in the previous year due to advice remediation and subdued performance in wealth protection.
At the same time, the company listed transforming the wealth management business and reshaping the advice networks as being part of its 2019 priorities.
It said it would be streamlining wealth management’s operating model and product offering.
The company’s new chief executive, Francesco De Ferrari described 2018 as having been a challenging year for AMP with the continued growth of AMP Capital and AMP Bank managing to offset the headwinds faced in Australian wealth management.
He described the Royal Commission as having been “a confronting but valuable experience for the financial services industry” which had served as a catalyst for change at AMP.
“We have undertaken Board and leadership renewal, accelerated client remediation and sharpened our focus on delivering better value to customers, including reducing fees on our MySuper products,” he said.
De Ferrari said that 2019 would be a transitional year for AMP as it prioritised the complex legal separation of the life insurance business and delivered on its commitments to remediate advice customers and strengthen its risk management and governance controls.
The AMP results showed that its Australian wealth management earnings declined by $28 million to $363 million mainly due to higher margin compression from the MySuper fee reduction, weaker investment markets and the transition of clients to lower-cost contemporary products.
The company declared a final dividend of four cents per share.
Recommended for you
Minister for Financial Services, Stephen Jones, has said he did not expect backlash to changes around advice fee deduction and believes the second tranche will have greater impact, committing to enact it by May 2025.
Financial adviser numbers are “back in black” for the year to date, thanks to 50 new entrants joining the industry over the last four weeks.
An equity partner firm of Count has purchased a Brisbane-based accounting business for nearly $1 million, as Count drives forward its inorganic growth momentum.
Australia’s looming intergenerational wealth transfer remains a crucial opportunity for financial advisers, with 14 per cent of consumers looking to transfer $1 million or more.
