AMP chief executive Craig Dunn has warned against what he sees will be permanent damage to competition in the wealth management market if National Australia Bank’s proposed takeover of AXA Asia Pacific is allowed to proceed.
Dunn outlined his arguments — in the final days of the ACCC’s deliberations on the matter — in an email to senior management yesterday. The ACCC is expected to rule next week on a revised NAB bid for AXA Asia Pacific, which includes the sale of AXA’s North platform to IOOF. Even with a green light from the ACCC, the bid can still be blocked by the Treasurer. AMP has been conducting last minute lobbying on the matter, including releasing research late last week it said revealed Australians’ aversions to more bank takeovers.
Reports from Fairfax and News Limited discuss arguments outline by Dunn, including the view that IOOF is too much of a minnow to attract the funds and support to take on bigger industry players.
"Essentially the undertakings offer the hope that IOOF might emerge as a strong and vigorous competitor against the certainty that NAB's acquisition of Axa will lead to a definite and absolute loss of competition," reports of the email state.
"To accept that IOOF might emerge as a serious competitor in the wrap market, you need to believe IOOF can attract sufficient funds and planner support to take on the big players while at the same time completing a very complex and challenging change program in just three years.
"This is a very challenging task for any successful company, let alone a relatively small organisation like IOOF."
Reports pointed to Dunn’s comments that IOOF must consolidating its existing six platforms into three, integrate North and take its business into a fee-for-service environment — all in the next three years.
"While achieving all of this, IOOF is expected to grow its funds under management and planner footprint to the point where it offers serious competition to Macquarie, Westpac and NAB in the wrap market," he said.
Dunn reportedly said IOOF lacks adequate distribution to support such an expansion.