AMP planning firms set to consolidate

Australia’slargest financial planning dealer group, AMP Financial Planning, is predicting extensive amalgamations within its network of planning firms as part of the implementation of its radical new remuneration policy for advisers.

AMP Financial Planning managing director Greg Kirk has confirmed the dealer group is contending with wide scale interest in amalgamations across its adviser sales force since announcing details of the new remuneration structure in January.

The new model, due to take effect from July 1, will reward larger planning firms by paying a better rate of commission to those firms which generate a greater volume of business for AMP.

“If scale drives benefits, then advisers are thinking whether they should get together and get some of that benefit,” Kirk says.

AMP developed the new remuneration model in conjunction with advisers themselves through the representative body for AMP financial planners, the Australian Association of AMP Advisers.

But the president of the association, Paul Carter, has warned AMP planners against merging their business solely to take advantage of the new model.

“A lot of advisers have come to the view that they will be better off under the new model if they come together. But if advisers do come together it has got to be because of genuine business reasons and not only because they want to take advantage of the new dealer proposition,” Carter says.

He says the association has received a high number of queries since details of the policy were announced.

AMP has offered all advisers who are worse off financially in the first 12 months of the new remuneration model, a one-off payment of up to $2,000.