The embattled institution has released a Q1 update ahead of what is expected to be a heated annual general meeting in Melbourne this morning.
In a statement, AMP interim executive chairman Mike Wilkins acknowledged that the royal commission has been “exceptionally difficult for [AMP] customers, shareholders, employees and advisers”, and pledged allegiance to its ailing advice network.
“AMP stands behind its advice business and the value it creates for customers,” Mr Wilkins said. “However, we have been very disappointed that, in some instances, our customers have not received appropriate levels of service for the fees they have paid. We are working hard to accelerate the remediation for our customers.”
AMP remains Australia’s largest financial advice provider, but analysis from Bell Potter Securities indicates the network is haemorrhaging, with more than 70 individual advisers leaving AMP licensees since the beginning of 2018.
The company has also confirmed that two class action lawsuits have been filed by litigation firms on behalf of shareholders and says it will “vigorously defend the proceedings”.
The Q1 update lists a number of financial metrics ahead of the AGM, which Mr Wilkins said indicates the company is “well-capitalised” and has areas of “strong growth”.
However, the results also indicate that total wealth management AUM was down 2 per cent to $128.3 billion at the end of the quarter, which is attributed to a negative investment market environment.
The statement said that board renewal and the appointment of a new CEO are top priorities alongside customer remediation.
Earlier this week, three board members left AMP following the appointment of former CBA chief executive David Murray as chairman.
Westpac chief executive Brian Hartzer also made comments this week confirming his organisation’s commitment to its wealth management and financial advice business.
By contrast, NAB has announced it will seek divestment from MLC, including its financial advice licensee network.
Aligned planners may go broke, AMP itself will work out a method so that it doesn’t. They write the rules are are the judge in the event of a dispute. Just as the banks won’t be punished significantly by the RC.
AMP will be around for a long time to come that’s for sure
Planners have a fiduciary duty since 2013 with best interest. I can’t possibly see how a product manufacturer and an advice firm could be linked “successfully” and still meet this fiduciary obligation.
The role of a fiduciary is to work for the client, to step in their shoes…you don’t work for AMP. Yes possible it could work but not successfully and it’s a ticking time bomb for most advisers. I don’t think a lot of advisers actually understand what a fiduciary relationship is. Sam Henderson is a classic example. Dealer groups and the AMP’s of the world have glossed over it & dumbed it down to this simple notion of acting in the best interest of the client but it’s actually much much more. To be blunt advisers haven’t been educated in it properly because the product maker drivers the education. Many advisers still live just in a “know your product, know your client, reasonable basis” world. Hence why the QC Rowena Orr had so many draw dropping moments in the Royal Commission. I think we’re seeing the end of product and advice being so closely linked.
You are banging on about AMP and you use the pinup boy for independence as an example??? please explain
AMP should reprise the old “good bank / bad bank” strategy. Give the legacy BOLR advisers an option to re-establish in a 2018 model. If they don’t want to they move to “bad bank” – how can there be independence of advice when an adviser can get up 4X multiples?? AMP divest all ownership in any practice to allow full independence. They review any current AMP Bank covenants to ensure there are no implied conditions to direct business to AMP product. Any and all agency agreements are reviewed to ensure there are no direct or implied conditions to support AMP product.
Don’t just punch board members.
The heads of each AMP dealer group ( and directors on any of their boards ) should be replaced – regardless of tenure! This will be a real test for the new head man because AMP has always looked after the “rusted on”.
BOLR, grandfathered commissions are the root cause, let’s see if they survive
BOLR is paid on ANY recurring revenue source (ongoing advice fees and commissions) it is not geared to any particular provider. what needs to change are the APLs
spot on, it seems many others wish to propel misinformation.
Are we seeing a slow demise akin to the fast demise of Babcock and Brown?