An AMP spokesperson has confirmed to ifa that the listed financial services giant has officially updated its policy and calculation tool for BOLR terms to reflect changes it decided upon in 2016.
Among a number of amendments, the new approach to BOLR sees AMP switch to a practice valuation methodology that includes fee-for-service revenue rather than just FUM.
Speaking to ifa, AMP Financial Planners Association (AMPFPA) chief executive Neil McDonald said the representative body supports the formalisation of the changes and that aligned advisers have been consulted throughout the reform process.
“It’s a much simpler calculation, which is based on all on-going recurring revenue. This includes fee-for-service and any product, whether it is on the APSL or not,” Mr McDonald said.
“The BOLR policy has evolved over time to remain contemporary … [AMPFPA works] closely and strategically with AMP management to continually improve our advice and other processes, so it wasn’t lobbying or a pure management decision.”
Mr McDonald, who also leads the Hillross Advisers Association, added that aligned advisers support AMP CEO Craig Meller’s stated goal to transition the company from a “product and distribution business to a customer-led organisation”.
“This is a positive change and demonstrates AMP’s forward thinking to recognise industry trends and continue to put advice at the centre of their thinking,” he said.
AMP’s BOLR policy has been contentious in the past, with AMP advisers previously telling ifa that the protocol was one of a number of “exit hurdles” preventing potentially “hundreds” of advisers from leaving Australia’s largest financial advice network.
Why does nobody use their name on this, everybody is Anonymous
lol
Classic
The vitriol here is obvious but I must be missing something.
By way of disclosure I’m not an IFA or AMP FP licensed planner. So, as an independent observer (pardon the pun), it would appear to me that the new BOLR arrangements, which no longer seem to provide any product bias are a great marketing ploy for AMPs licensees, but will also remove any encouragement for them to write AMP product?
AMP would argue that BOLR is just about keeping the revenue stream in house, and leaving aside the obvious issues of being affiliated with a major institution I’d certainly like to have a written guarantee of the minimum amount I could sell my business for if I wanted to exit?!
Yes, the structure of the BOLR plan would seem to no longer favour AMP product over any other. However the BOLR valuation amounts do provide additional incentive for advisers to join and remain with AMPFP. AMP’s “guaranteed” BOLR valuations are much higher than the true value of the business on the open market. With many AMP planners likely to retire over the next 7 years as LIF and degree requirements kick in, the cost of BOLR may provide some rude shocks for AMP shareholders.
Firstly we have commentary on s923A, and then commentary on changes to BOLR. These two seem miles apart, but if they are not, could someone enlighten me.
It’s a great article I reckon, it’s a reminder of what advisers have in common. The two articles are miles apart Annon and yet we have the FPA coming out and saying there are no differences between independently owned advisers and AMP advisers. Yet here we have today a clear signal of how AMP is still living in the 1970’s. A conflicted payment that carries on today. We see a lot of advisers out there shouting about there so called independence and how they are more independent than the next independent non-aligned adviser. This is article is a reminder of what we have in common. Do you have a client register ? AMP does, a group of customers where the AMP adviser bleeds & leeches as much revenue as they can for several years and sells back. Most advisers have relationships and we have customers and we certainly don’t have BOLR.
I thought the point of the changes was to remove conflicts associated with BOLR? The way I read it AMP advisers get paid BOLR at the same rate now regardless of whether their client has AMP product or not.