According to a statement from AMP Limited, its AMP Financial Services entity saw net cash flows of $95 million for the quarter to 31 March 2013, signifying a $387 million turnaround on its Q1 12 figures.
The turnaround is accounted for by a “strong performance by its retail business on AMP platforms with $391 million net cash flows compared to outflows of $45 million in Q1 12”.
In particular, the North wrap platform performed well, off the back of a “strong take-up across AMP’s aligned planner network”.
AMP’s wealth management arm also performed well, with assets under management (AUM) at $89.8 billion, up 4.6 per cent on Q4 12, while AMP Capital AUM is up 1.6 per cent to $130.7 billion.
The statement also singled out the impact of “strong flows into AMP SMSF”, which saw almost double cashflows up $42 million to $97 million. Five hundred additional SMSF member accounts have been set up within AMP since Q4 12.
AMP’s SMSF business was established in June 2012 and is now “market leader” according to comments made by AMP chief executive Craig Dunn to ifa in April.
“SMSF is the largest and fastest growing sector in the market and that makes it attractive to us,” Dunn said. “We intend to continue to dominate market share.”
An increase from “over 9,100 to over 9,400” is 300 new member accounts, not 500.
Regardless, 300 new member accounts is, what, 200 new SMSFs at best and you can’t ignore the likelihood that many of those new accounts would have cannibalised existing AMP retail super accounts. Hardly a stellar performance given the size of AMP’s sales force of around 2,000, is it?
It’s also interesting that every other product area’s success is defined as NET cash flows, but the paragraph in AMP’s media release singing the praises of the SMSF business omits this important qualifier. Is it because the picture is somewhat less rosy when the outflows from the Super IQ disaster are netted against it? Shareholders deserve some full and frank disclosure about that situation and how AMP plans to deal with the inevitable fall out.
The various press releases over the past 2 years from AMP SMSF / SuperIQ make interesting reading – industrialisation of the sector & market domination. Well an increase of 300 funds in 3 months is hardly a great return for the millions spent in this sector. In November 2011 Mr Bloore (CEO of SuperIQ), said he expects SuperIQ will ‘Within the first six months expect to have 3,000 funds. Where we want to be is at 20,000 funds in the next four years.’ Well after 18 months SuperIQ has 1,365 funds. This includes the approximate 1,000 ex smartsuper funds that SuperIQ purchased. SuperIQ has failed to achieve any of the over optimistic targets, and has a long way to go to achieve the 20,000 funds in 4 years. The progress to date has been costly and painfully slow. How long will it take before AMP realises that their attempted industrialisation of the SMSF sector is doomed for failure?
I have no doubt that the SMSF Platforms run by the Retail funds Sector would be the most expensive to operate by way of
fees that is the only reason AMP has increased their Profits to such levels.
Historically these funds have never performed well against the backdrop of
Industry funds over time.