AMP reports $47m advice loss; new chair appointed

AMP has announced a new chair for its board, while its advice division has reported an underlying net profit after tax (NPAT) loss of $47 million in the full year 2023.

The loss was an improvement, however, from losses a year ago which were $68 million in the full year 2022.
Advice revenue fell slightly from $56 million a year ago to $50 million, but revenue per practice grew from $1.59 million to $1.75 million. 

The firm said in the ASX announcement that it is making “continued progress in establishing advice as a sustainable, standalone business” and adviser numbers are stabilising, with new advisers attracted to the firm. It also forecast a “continued focus on reaching breakeven” in advice and is considering alternative structures for the advice business, including a digital advice arm which was flagged last November.

It currently has 866 aligned advisers, 112 advisers via its Jigsaw service and 330 aligned practices.

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During the year, it also settled its Buyer of Last Resort proceedings in the Federal Court with a $100 million settlement.

On the platforms side, it reported an underlying NPAT of $90 million, up from $65 million a year ago, reflecting favourable market conditions, higher equity markets and stabilising interest rates.

Net cash flows (excluding pension payments) were down from $2.5 billion to $1.4 billion, impacted by the shift of non-super investment away from platforms, reflecting prevailing economic conditions. Flows into AMP’s flagship platform North from independent financial advisers (IFAs) were up 33 per cent on the prior period, reflecting an ongoing focus on this market.

AMP chief executive, Alexis George, said: “2023 was a year of progress for AMP. We have repositioned the portfolio with the completion of the AMP Capital sales, built momentum in our cost-out program, and resolved a number of significant legacy legal matters.

“With AMP now in a stronger position, we have a clear strategy focused on three areas.

“The first is to drive the profitability of our businesses, AMP Bank, Master Trust, Advice, Platforms and New Zealand. The simplification program and investment we’ve undertaken across the portfolio is delivering positive outcomes for our customers and provides a foundation for sustainable growth.

“The second is efficient cost and capital management, including delivering on our commitment to further simplify and right size our cost base, and diversifying our funding mix in AMP Bank. We have a strong balance sheet, and remain focused on optimising capital – including returning surplus capital to shareholders where possible.

“The third is to build on our capabilities across the wealth value chain and large customer base to create new sources of revenue and lasting points of differentiation with customers. This includes building our digital capabilities, and developing new products and services to address the unmet needs of Australia’s growing retiree population.”

New chair

The firm also announced chair Debra Hazelton will retire in April after five years and has appointed Mike Hirst to replace her. 

Hirst is currently a non-executive director on the board and chair of its risk and compliance committee. In the past, he worked as chief executive of Bendigo and Adelaide Bank and has 40 years of board and executive experience at firms such as Westpac and Colonial First State.

He said: “AMP has a dedicated management team and a clear strategy that it needs to deliver on. I look forward to working with Alexis as she leads the business to deliver growth opportunities and to drive improved investor and customer value.”

Hazelton added: “During my tenure as chair, AMP has undergone a significant transformation to set the company up for a sustainable future. We have a strong chief executive and management team in place, the board has been renewed, the business is repositioned, the strategy reset, the AMP portfolio is simplified, the capital base is strong, and substantive legacy issues are resolved.

“I believe now is the right time for me to hand over to Mike Hirst, as the company embarks on a new chapter focused on growing as a retail bank and leading wealth manager in Australia and New Zealand.”