AMP has updated its portfolio simplification program, stating negative short-term profit impacts from strategic decisions around banks and platforms will benefit the long-term business.
In a speech to shareholders, AMP’s chief executive, Alexis George, detailed to shareholders of the firm’s priorities.
Transformation and reduced costs in the advice business had seen net profit after tax in the advice division halve from a loss of $146 million a year ago to a loss of $68 million.
“In our advice business, we successfully drove down costs for the second year in a row and more than halved the losses in that business to further improve AMP’s overall profit position.
“Continuing to drive our advice business towards breakeven is one of the business’s highest priorities and good progress continues to be made. In addition, relationships with the broader adviser community and AMP continue to improve, which is a critical factor for success.”
In the platform space, George said the focus was on competitive pricing, meeting customers’ digital needs and their investment choices, as well as launching retirement income solutions.
“These focuses allowed us to grow our footprint in 2022 with platform net cashflows of $936 million. These innovations mean we continue to see a positive upward trajectory in flows from these independent advisers, which we continue to target.
“In our platforms and superannuation business, we also took the strategic decision to reprice these offers to better compete in the market. While this impacted our profit in FY22, it will benefit both businesses as we move forward.”
She also acknowledged that the cost base had been too high for the company’s size and it was working to “right-size our operating model for agility and efficiency”.
“We acknowledge our cost base is too high for the size of company we are today. However, we have been through significant change in the last years and still have to work to completely separate the businesses that have been sold.
“2023 will see flat costs in a period of higher inflation than we have seen for some time. This means that we need to take actions to both deal with the upward cost inflation and the additional costs that have emerged from the sales.”
