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.