At a teleconference briefing yesterday, AMP acting chief executive Mike Wilkins said it has been quite open around what the impact of the royal commission has been on advisers, and that AMP needs to acknowledge that.
However, he added that advisers sticking with AMP are seeing the benefits of keeping a long-term relationship with the group.
“Also, at the same time we’re doing a bit of reshaping of that network because we’re looking to make sure that that network is as professional as it can be, as productive as it can be, and is obviously as compliant as it can be,” Mr Wilkins said.
Mr Wilkins also quashed the idea of a potential separate listing of either AMP Capital or its wealth management business in Australia.
“That’s the case now. We have approved product lists which are available to our advisers, and they will recommend the most appropriate product for the customer, so we have to compete in the same way that others do,” Mr Wilkins said.
“That’s both in the wealth management business but also in the wealth protection business because for a long time we’ve had a suite of other insurers that have been available to our advisers to write, not just AMP.
“Really, the advisers have got a best interest duty, which is why we have moved to that menu of seven years ago.”
Further, Mr Wilkins rejected any notion that its intention to offload its New Zealand wealth management and advice businesses via an IPO or the sell its life insurance business to Resolution Life for $3.3 billion were brought about as a result of the royal commission.
“We were under way with this anyway. We had flagged a portfolio review because we were looking to actually free up and redeploy capital into the longer-term growth businesses that AMP has, and they are our wealth management business, AMP Capital and AMP Bank,” Mr Wilkins said.
“I don’t think it’s right to say that the royal commission forced this at all.”
The concept of advisers wishing to stay with AMP is simply untrue. Of course, AMP have lied to the regulator so we should have no expectation that they would not lie to the rest of us.
I am now looking to recruit advisors never had done for years but I feel sorry for these advisors or anyone my company is Australian financial services no is 039437 8405
How much does an insurer have to pay these days to get on the APL of AMP? Is it $350,000 a year?
A lot of people won’t understand the dilemma AMP planners face. Many have bought books of clients from AMP or other planners at a typical rate of 4 times. Mostly, they have had to obtain finance for these purchases – AMP is the lender in almost every case.
If a planner chooses to leave, AMP have been watering the value of their 4x BOLR down by the introduction of compliance reviews on the planner’s businesses. Since they are able to ‘manufacture’ a poor outcome if desired, this significantly reduces the value down from 4 times.
Then, they pay 50% of the value and hold the remaining 50% back until 12 months after the planner leaves.
In this 12 month period, the clients are somehow meant to be retained by substandard employed planners who have zero relationship.
Any drop off of clients reduces the second instalment.
The planners have taken on all of the risk, and AMP have total control of this.
Oh, and the planner is unable to operate as a planner for 3 years.
By the way, they are unable to sell to businesses outside of the AMP network, or transfer their clients to another licencee even if they chose not to go BOLR.
Unfortunately, they should have done their research before committing to buy a book. Those issues have been well known for a really long time… I feel for them but buying a book of grandfathered revenue clients, generally far more clients than you can ever service if they were actually opt-in, of which you cant commute or sell outside the network, was just bad ‘financial planning’.
Many of the people who bought these books were recruited into AMP as part of a “career change” program. They were not experienced financial planners. At the time of purchase they had limited understanding of how the industry actually works and were reliant on what AMP told them. They thought they were making a decision to secure their financial future, at a time in their lives when they had left the security of their old job and were focused on learning a new career.
it doesn’t matter, they should have sought legal advice and financial advice before entering into a contract. too bad they didn’t. they should have.
they had limited understanding of how the industry operates, and they still paid money to get into the industry? they deserve it.
AMP products have always been overpriced, just about most expensive on the market. With the exception of the large corporate super books (an area that FOFA killed off anyway). Buying into this for a career change? Right there that tells you most of what you need to know.
AMP needs to remove the restrictions on advisers leaving and taking clients with them. If they make sure the process is smooth and amicable, and the products are competitive, they can still retain much of the revenue without all the compliance risks and BOLR liabilities.
BOLR was only ever intended to be paid to retiring planners. It has been misused by planners trying to leave the AMP network and start again elsewhere. But this is because AMP’s “client ownership” policies encourage planners to use BOLR as compensation for their lost client base.
I notice that AMP has been promoting “Jigsaw”, a support service for self licensed advisers. Does anyone know if AMPFP allows advisers to become self licensed via Jigsaw, and transfer their clients without restriction?
It is a pity Mr Wilkins does not read some of these comments, my understanding the only reason the vast majority of Advisers are still there is because of the VPS Bonus system , once AMP remove the VPS the advisers will depart the AMP in droves, watch and see.
[quote=Anonymous]Some would argue that was needed, I remember doing some contract paraplanning for AMP a few years ago, I did around 50 plans – 100% of them recommended 100% AMP product in a post FOFA world. [/quote] I would see that as totally unusual and not representative. I personally have written a great portion across various other insurers and I feel I should correct you. Im not unusual and many AMP advisers spread the risk according to the need. We applied BID from 1989. We were not told we had to put our clients interest before ours, Its obvious.
Not surprising that outsourced paraplanners see more “sales oriented” rather than “client best interest” behaviours. Most client focused planners will do SoAs inhouse and take the time to customise them to each client’s situation.
Sales focused planners are more likely to see the SoA as purely a compliance box tick and happily outsource them to a cookie cutter factory, knowing they can cover the cost by spending more time on sales. They never read the SoAs and don’t expect their clients to either.
I’m with AMP and I barely write AMP Insurance due to the better options, underwriting and service provided by alternatives in the market.
First they lied to ASIC and now they lie to themselves. Advisers who are linked to AMPFP are trying to leave in droves, have an exceptionally poor opinion of AMP and aren’t writing AMP as a product provider. If Mike believes that advisers remain positive about AMP how about he publish the results of the recently completed Net Promoter Score survey when they are available. I’m personally expecting an average of less than 2 out of 10.
So, the bright blue spark finally blew up
The best way to boil a frog is to drop it into cold water and turn up the heat .
The frog gets used to the change in temperature ,by the time its to hot to get out he dies.
Mr Wilkins just needs to wait out those frogs until the new and improved Robbo advice version of AMP or whatever the new Brand is called .Three things are certain .
They will Rebrand, they will find a way of getting their solutions to market by technology not old fashion advisers. The incumbent Frogs sorry tied agents of AMP will not be able to sell business they have spent a lifetime building .
There will be no loyalty shown to those Frogs from the incoming board .
Time for them to find a new pond and evolve.
AMP would NOT stand by me so I won’t stand by them after 17 years of service. They can shove BOLR and everything else where it fits as I’m out of there very soon. The grass IS greener on the other side and all AMP advisers should not be afraid of them and take action by just walking
Did you leave the industry or move to another licensee ? If you moved did you take, or were you able to move your clients (unofficially of course) ?
This is a joke – absolutely everything is worked in AMP’s favour, current BOLR arrangements do not provide the exiting practice with any confidence whatsoever. The funny thing is, AMP make you pay 4 times for their rubbish but then now when you go to sell it back you have to jump through a number of compliance hurdles. This needs to be changed ASAP and a line needs to be drawn going forward. Pay people out what they’re entitled to and draw a line going forward where their is no conflicted structure!
Oh no we dont!
I guess the BOLR terms of 3 times, the subsidized software, the free client survey that costs $2,000 and all the other kickbacks and subsidies would encourage advisers to stick with AMP.
They are not STICKING , there are STUCK !!! Well they can’t just sell up their book on the open market like other advisers due to the handcuffs they produce now can they?? Can’t understand why the ACCC doesn’t look at these old arrangements . Also the marketing allowances of $100,000 plus p.a oh.. only if you write AMP or retain AMP , no conflict there !!!
Yep. An FSG several pages disclosing potential payments. Aligned AMP Distribution Agents have something called a “Client Register”. Other businesses have….. human beings, clients, and or customers….and that’s why AMP share price is $2.50. In 20 years I have never ever recommended anyone buy AMP shares. It only took 20 years but finally the day of reckoning is approaching.
AMP capital Oz equities team dont even invest in AMP shares
Well said. seems some people just don’t get it.
Mr Wilkins you are drinking your own bath water how many planning practices have you visited personally? Your compliance vetting and paraplanning teams are not aligned in policy implementation interpretation and procedure ……… there is a lot of work to be done
AMP advisers are so institutionalised and handcuffed they don’t have a choice feel sorry for the denial that comes from any AMP practice about how great things are, clients might not feel the same way.
There is no value whatsoever in remaining with AMP or the AMP brand. It is another act of dishonesty to say that AMP advisers see value in remaining as the facts are that it is almost impossible to extract oneself from the sinking ship of AMP. BOLR has been changed to make it a massive loss to the adviser if they take it and the adviser can no longer work as an adviser under BOLR. This story is just another example of the gross dishonesty that pervades the AMP group.
AMP are hanging advisers out to dry left, right and centre. An organisation with zero scruples.
The only thing AMP have done is massively increase the compliance burden on the advisors.
Cost of doing business – through the roof.
What rubbish.
Some would argue that was needed, I remember doing some contract paraplanning for AMP a few years ago, I did around 50 plans – 100% of them recommended 100% AMP product in a post FOFA world.
When will someone get it. More and more compliance will not stop that – a Super fund is just an administration platform – the investments are the important part. ASIC and clearly you need to understand that more compliance on advisers will never change the approved list of an AFSL. Commission have been blamed for bias (yet commissions exist in just about every other area in Australia – Mortgages etc) and FOFA. ASIC has what…. 1,100 court case in the last 10 years and 10 against the Bank (including 3 for Storm and 4 Bank Bill Swap). AMP compliance is now simply preventing any Advice. And can I ask, if all this compliance is simply about “100% of them recommend AMP product” (and I seriously doubt it) – is it OK if I work for an Industry Fund?
The elephant in the room (and a rather large pachyderm at that)…is that even though some advisers may remain with AMP due to BOLR handcuffs – it is their CLIENTS who have and will vote with their feet. Anglican Super and Australia Post have already moved to competitors – I’ve heard that most of their other corporate clients are assessing whether or not it’s in their members best interest to remain with a tainted brand. Retail FUM inflows have also significantly dried up due to the breach of trust. Combine all this with the increased interest from advisers to either get their own license or join a non-aligned licensee, I just don’t see AMP remaining as a licensee for much longer. Only time will tell I guess.
A menu of options.. on insurance perhaps but until very recently the APL for investment/super/pension was AMP, AMP or AMP. Owners of business’s may be staying but employee advisers are leaving in droves, as you would expect.
Yes amp advisers leaving at a rate of 1 a day ?? And 1.5 bil of AUM gone to industry funds . Close the gate on the way out .
Isn’t it wonderful after the complete disaster of AMP at the RC and consistent intentially knowledge of breaking to law thousands of times that they come out with this corporate BS that it’s really all OK.
Get bloody real AMP – no one believes your corporate BS PR spin.
We can’t go…. We all would run out the door as fast as we could if we able to do so.
Omg… the management of amp are delusional. I’m an adviser there and can’t wait to leave. It’s getting worse by the day 🙁
Just not right to say that Advisers are benefiting from the current debacle at AMP. AMP Compliance has overreached its mark causing paraplanning service costs to skyrocket to 50% more, advisers spend 2 hours more trying to meet AMP compliance standards that has nothing to do with ASIC. Every second adviser would like too depart AMP because it is just too hard.
HA HA this is so funny. So AMP planners who have golden handcuffs BOLR will stick with AMP, I wonder why and no there is no problems in AMP. The royal commission was just in the past, lets move on now.
AMP also have “conflicted compliance” to hold over any planner wanting to run.
“…advisers sticking with AMP are seeing the benefits of keeping a long-term relationship with the group.” And pray tell what might they be? Higher redundancy payments? Better severance payouts? 😀
Can’t be a redundancy or severance as neither of those are payable to the Self Employed planners
What a lame article. Ever heard of confirmation bias?
I have doing my behavioral finance subject as part of my Graduate Diploma. Thanks FASEA
I heard of it 30 years ago doing a psychology degree. But apparently that degree, and all the other study I’ve done since, is worthless. I now need to enrol in more courses to line the pockets of Brimble & Longstaff and their snout in the trough cronies.
Thanks FASEA.
It’s got nothing to do with AMP owning the clients???