AMP punishes past executives, defends vertical integration
AMP Limited has confirmed that a number of former executives and board members have already paid a price for the matters raised in the Royal Commission via the forfeiture of long and short-term incentives.
However, it has defended its vertically integrated structure.
In a response to the Royal Commission released to the Australian Securities Exchange (ASX) today, AMP said the royal commission had been a catalyst for change within the company and that it would be working constructively with government, regulators, advisers and trustees to ensure change in the best interests of customers.
It said AMP embraced the need for change and had already taken significant steps to improve culture, governance and accountability including:
- The appointment of David Murray as an independent chair
- The appointment of Francesco De Ferrari as chief executive
- Board renewal
- The appointment of Alex Wade as Group Executive, Advice
- Acceleration of a coordinated advice remediation program
- Appropriate consequence management including forfeiture of long ad short-term incentives for a number of former executives and a reduction in directors fees for 2018.
- Commitment to invest $100 million (pre-tax) over two years to strengthen risk management governance and controls.
Commenting on the Royal Commission report, AMP chairman, David Murray said it would be a turning point for the industry.
However, he said: “AMP notes that the benefits of vertical integration remain available for customers while acknowledging that conflicts of interest need to be more effectively managed”.
“The proposed regulatory changes will require serious and determined effort to implement but, with the support of industry, should deliver better outcomes for customers,” Murray said.
Recommended for you
Sharing his reasoning in joining the FSC board, WT Financial chief executive, Keith Cullen, believes “product and advice cannot be separated” from each other in the current environment.
The Emerge Foundation, a charity run by financial advisers and fund managers, has announced a scholarship program to help veterans transition into tertiary education.
In an open letter, Sequoia chief executive Garry Crole has hit out against shareholders “with a personal axe to grind” as he fights for his job ahead of an EGM.
The JAWG has announced it is in talks with Treasury around five “core principles” to strengthen the education standards for new entrants to the financial advice space.
