AMP Limited has formally moved to restore its reputation with the announcement of an accelerated advice remediation program and fee reductions across its superannuation products.
The advice remediation program will affect both employed and aligned advisers.
In an announcement released on the Australian Securities Exchange (ASX) today, the company said that the advice remediation program was being accelerated to ensure impacted advice customers were appropriately compensated with the result that the company’s first-half results would be impacted by a provision of $290 million.
The company told the ASX it was taking actions to “reset” the business including the advice remediation, the fee reductions to MySuper, investment in strengthening risk management systems and controls, and reprioritising its portfolio review.
Commenting on the moves, AMP acting chief executive, Mike Wilkins said the remediation provision responded to industry-wide issues raised by ASIC and reflected a conscious business response to increased community expectations.
“This remediation program is complex as it will address both employed and aligned advisers, and we understand it is one of the first programs to do so,” he said.
The company said it was also delivering better value to superannuation customers through fee reductions to its flagship MySuper products with the pricing reductions being implemented in the third quarter.
It said it would be investing in significant enhancements to the company’s risk management controls and compliance systems, and this was expected to result in approximately $35 million a year of one-off costs over the next two years.
The company said it expected to deliver a first-half underlying profit in the range of $490 million to $500 million, which it said would demonstrate growth across its core businesses.
