AMP to 'unbundle' advice and product costs

AMP will break its traditional nexus by separating the advice and product costs charged by its 1,300-plus financial planners as part of a project called ‘Advice 2010’.

AMP chief executive Craig Dunn has flagged a new era for the financial services company, saying the group has begun “evolving” its advice model.

Under the Advice 2010 project, Dunn said advice fees would be unbundled from the cost of products, and would become “even more transparent”.

Money Management contacted AMP to clarify that this represented a shift to a fee-for-service model for the group, but had not received a response at the time of publishing.

Dunn said financial advice businesses now need to move to “more process-driven, industrialised modes that allow the cost to serve for financial planners to be dramatically lowered”.

He said technology would play a key role in this evolution, in both helping to drive down costs and create new ways for planners to interact with their clients.

Dunn said the “patronising view” that “financial advice is something that only rich people need or deserve” stems from a misconception about what financial advice represents. This view neglects the fact that advice can also help people to own their own homes sooner, provide insurance cover and maximise clients’ retirement benefits, he said.

He said that while many people know they should work towards these goals, they often need assistance to achieve them.

Speaking at a Trans-Tasman Business Circle event yesterday, Dunn also warned against potential changes to the regulation of superannuation, and defended the integrated financial services model employed by AMP.