Market analysts have begun referring to a so-called ‘Halloween deadline’ for unprofitable AMP planners to leave the company.
The latest reference has come from stockbroking analysts at Bell Potter in reference to AMP’s release of its September quarterly inflows update released to the Australian Securities Exchange (ASX) last week.
It said that AMP had played a straight bat with respect to the inflows data but had provided no commentary regarding the key issues that Bell Potter saw the business facing.
The analysis said the “reality is AMP is in the midst of its biggest cull of advisers ever, with the so-called Halloween deadline less than a week away”.
It said the Halloween deadline referred to the date AMP had set for its unprofitable advisers to exit the organisation.
“In addition, it defies logic that AMP hasn't provided an update or any commentary on its remediation program, particularly given three of the four major banks have significantly increased the respective program costs in the last few weeks,” the analysis said.
Bell Potter calculated that AMP had set aside only a fifth of what the major banks had done, when calculated on a per adviser basis.
The analysis also pointed to concerns around the ultimate cost of buyer of last resort (BOLR) arrangements.
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The amp executive is having their annual halloween party, where they all dress like the grim reaper and tick off the unsustainable amp planning businesses. Of course ferrari comes dressed like the clown Pennywise, which by pure coincidence is the name of the new robo advice platform.
It's not that surprising AMP's remediation provisions are much lower than the banks. Anecdotally at least, the banks are paying out huge "fee for no service" refunds in cases where the service was actually provided. They seem to be doing it as a PR gesture, to restore the value of their banking brands. They don't care about excessive admissions of wrongdoing in their wealth management operations, because they're getting out of it anyway.
AMP doesn't have a huge banking brand to protect and is staying put in wealth management. There's less incentive for them to pay "remediation" in cases where there wasn't actually any wrongdoing in the first place.
Correct, AMP aren't just refunding all of its' customers, like the other banks have. There are a few other differences:
* Many practices joined AMP from other licensees, and the Lookback program will only seek to reimburse clients from the date they joined AMP, not since inception.
* In many cases, AMP won't be paying refunds, the practices themselves will have to pay.
* They have structured the program in such a way, that a fair few clients will 'fall through the cracks' (and not be reimbursed, in my opinion)
* If a particular client received service in some years, and not other years, they will only reimburse the specific years where 'no service' occurred.
* They negotiated with ASIC to find a less brutal definition of 'service'.
I was recently the beneficiary of another "PR remediation" program by a bank. I received a $50 credit in my CBA account with a transaction description of "Sorry". Apparently this relates to a CBA system outage a couple of weeks ago when some people couldn't access their accounts for a short period. I was completely unaware of it at the time and was never inconvenienced in the slightest. Yet they paid me (and I assume tens of thousands of others) $50.
Seemingly this is the economics of big bank PR. It's better to pay out millions of dollars in "remediation" to people who were never affected, than make the effort to identify the small subset who were, just in case one of them is missed and makes a public complaint.
With all due respect there is a bank remediation scheme that only looks after its interest regardless of its victims that ASIC has endorsed their disgraceful behavior
This gives this bank not only to cheat customers from their compensation but cheat them out of their compensations as well. The system is broken. The banks and AMP destroyed the system by their rampant and never ending greed. Anon only planners like you can lead the financial planning advice victims to the promised land - retirement bliss but will you want to do it and make the difference and save clients from financial hell and poverty
$1.3 billion liability AMP had regarding BOLR and the devaluation process to 2.5 times allows a transfer of the balance of the liability to the remediation program. Until they have the AMP advisers eggs in their basket they wont announce a thing.
Reference to "unprofitable planners" to me implies that that the particular planners were doing something wrong?
However AMP drew a line in the sand and said that anyone below that line is "unprofitable" meaning unprofitable to AMP?
The planners them selves may have actually been quite profitable?
You're spot on there, Anon. Just because a planner didn't shovel every client into an AMP product doesn't mean it's a bad business. The planner themselves may have been running a successful business, just not by AMP's metrics. I hope those in that boat are free to take their clients to a new AFSL and continue their careers.
No treat at AMP only tricks and more tricks
Remember royal commission findings
See them at head office at circular quay and be part of the activities dont forget to bring a pen so you ncan be part of the tricks
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