AMP Limited’s exposure to buyer of last resort (BOLR) arrangements with its financial planners impacted the performance of its wealth business, according to its first half report to the Australian Securities Exchange (ASX).
Revealing that the Australian Wealth Management division’s operating earnings dropped by $2 million (representing a one per cent) decline from the same period last year, AMP said this was largely due to “margin compression from MySuper transitions and a reset of the investment management agreement with AMP”.
However, the division analysis then pointed to the decline in ‘other’ revenue, noting that this was driven, in part, by negative one-off impacts associated with the purchase of client registers in the first half of this year on agreed terms.
The confirmation of the BOLR impacts follows on from the company’s full-year announcement in February when it said it had "deliberately reduced adviser numbers by tightening the classification of authorised representatives".
At the same time it said a higher than usual number of advisers had decided to retire or leave the industry in the face of challenging industry conditions and increasing education and professional requirements.