Speaking at the Future Generation Investment Forum in Sydney this week, the chairman of Wilson Asset Management quoted an unnamed AMP-aligned adviser as saying the issues exposed so far are “just the tip [of the iceberg].”
“[The adviser] said, [AMP] is rotten all the way through,” Mr Wilson explained.
Alongside this cultural hearsay, Mr Wilson also expressed doubt about the merits of investing in AMP.
Sharing an anecdote, Mr Wilson said he had asked a “very well-known” executive in the insurance industry about determining a price at which he should purchase AMP shares.
“He said, ‘I can’t come up with a value for you.’ And to me, the risk is … I just don’t know what price AMP is a buy at. There mightn’t be a price,” Mr Wilson said.
AMP’s share price was $5.46 on 9 March and has fallen more than 30 per cent to a low of $3.69 on 11 May in light of revelations from the banking royal commission, which has prompted resignations from its chief executive and multiple board directors, as well as a number of class action lawsuits.
AMP is structurally and morally bankrupt. I wouldn’t pay 1 cent for AMP shares. You’ve got AMP advisers out there saying how independent they are it’s so bad. He makes perfect sense.
Lucky that AMP aligned adviser did not tell Mr Wilson ⚽️ that pigs can fly because that would just be too much lol…
Loved your work on Cast Away with Tom Hanks by the way!
Geoff Wilson wouldn’t know what price his own company is valued at. Didn’t you buy an investment business 10 years ago and proceed to write every dollar of a multi million dollar purchase off because your own corporate advisory firm had no idea and got the whole things WRONG!!! The cheek of you Wilson.
How can a “high-profile fund manager” (Geoff Wilson) consider it prudent to make a public announcement based on the words of one “unnamed AMP-aligned adviser”? If that is how Wilson Asset Management form their opinions I will stay well clear of them.
If the whole story was presented AMP would look even worse. The directors have been and will be continue, quite rightly, to be lambasted. But most of the rot sits within the business’s business unit heads and the senior management teams.
“Commonly held sentiment” has touch on some of the rot. Every licensee under AMP had big financial incentives to recruit new advisers. In fact they even competed against each other for the same adviser with increasingly bigger incentives! And the business unit heads supported that dubious competition!! To fund the incentives AMP needed a predetermined funds flow into their in-house product. Unfair pressure was then put on any new recruit who didn’t meet expected funds flow or, heaven forbid, recommended a non house product because it was better for their client.
And this was done with full endorsement of business unit heads and senior managers. In fact lower their managers were put under pressure if they didn’t support driving internal funds flow irrespective of client suitability.
It’s time the business unit heads were brought to account.
the same result will become apparent within the big 4 if they dig deeper, especially one in particular. But don’t get too excited, as usual, nil zero nothing will happen.
I shall neither get excited nor hold my breath because the wagons will in a tight circle. But just to be careful, if I was a senior manager I’d sell any expensive property I have now. But would that be a sign of guilt if I did?
I think you will find it’s the same story in every vertically integrated financial services business. The people in power are remunerated based on product sales. They use that power to pressure advisers to do things contrary to their training and ethics. In an ideal world the adviser would just leave, but many are trapped by various forms of restraint of trade.
Absolutely correct. The RC should be delve deep into the recruitment practices, conditions attached to any deals and as you so rightly raise, the restraints of trade placed on “trapped” advisers.
Times change, and so does the business model. There have been many good folk, work for AMP both in the field and internally in the past.
The $64 question is, how does AMP re-engineer itself moving forward.
Was there ever any doubt about the AMP culture??? I was surprised more ‘AXA’ advisers didn’t leave at the point of the AMP merger. I was encouraged to stay with all sorts of financial inducements and the offer of a never ending VPS payment (volume bonus commissions for group product). The writing was on the wall then so I left – AMP are stuck in the past.
Fake news
This is not journalism. I’m certainly not an AMP backer and I don’t doubt that AMP has more issues than you can poke a stick at, but this is about commercialism, not morality. If you look behind the rant you’ll know AMP won’t approve his LICs so he’s getting on the moral band wagon to put the boot in. Please present the whole story.
thank you for that – way too many boy scouts here – with a race to the bottom – Wilson would be well advised to heed “those in very fragile glass houses should not throw stones” – probably more so than most