AMP reported a net loss of $252 million on Thursday (10 February), compared to a $177 million profit a year earlier, while its underlying net profit after tax increased 52.8 per cent to $356 million on the back of strong results by AMP Bank.
Australian Wealth Management (AWM) total assets under management (AUM) increased 8 per cent to $134 billion on the back of improved investment markets and a reduction in net cash outflows.
AWM’s underlying net profit after tax was $48 million, down from $64 million a year earlier, on the back of hefty losses in advice as it continued its transformation.
Namely, the underlying full-year loss of AWM’s advice division stood at $146 million, driven by a decline in revenue due to the cessation of grandfathered renumeration and an advice network reshape.
Advice revenue of $58 million was $57 million lower than in 2020, largely attributable to impairments to the carrying value of practice investments, AMP said.
Looking forward, AMP noted that the underlying full-year loss in advice is expected to improve by 50 per cent in full year 2022, reflecting the exit of employed advice, right-sizing network support costs and improving revenues.
Outside of AWM, AMP Bank reported an underlying net profit after tax of $153 million, signifying growth of 38 per cent, while AMP Capital saw its profit rise 18 per cent to $154 million.
“We have set a clear strategy to drive two simpler and more efficient businesses, well placed to compete, grow and deliver value in a highly dynamic market,” said AMP chief executive Alexis George.
“We’ve achieved a solid underlying profit result, which shows the strength of our Bank, growth of the North platform with increased inflows from external financial advisers, and the significant cost savings achieved from across the business, in line with our targets.
“We have good momentum in the transformation of AMP, repositioning our core capabilities to take advantage of the opportunities ahead of us, as we progress towards and beyond demerger as a simpler and purpose-led business.”
Why don’t we drop the pretence – the myth – that ‘advisers’ are primarily in the business of ‘advising’. No more than a microscopic number of advisers make a living – that is, generate income – solely and directly from their ‘advice’. Without the sale of recommended products, an adviser’s viability is next to nothing; hence the exodus of the many. ASIC, with the connivance of adviser representative bodies (AFA & FPA) and product providers (insurers and fund managers who now get their sales for nothing!) have succeeded in making advice too expensive, and the sale of products so difficult that a viable living for either has all but disappeared. Time we recognized the truth and got back to the business we’re supposed to be in. AMP’s (and others’) parlous state is one symptom. Or is it too late?
Is AMP still around?
AMP getting everything it deserves after the way it treated its advisers and clients. Serious lemon now thanks to greedy executive management.
In Money management it also states by AMP: “The client remediation process was now completed, it said, which had cost a total of $828 million, of which $588 million was paid to customers. ”
My questions are:
1. how much of the $828m client remediation did they guage from advisers?
So not only did they terminate the advisers, they reduced the multiple from 4 to 2.5, they then wiped off the 2.5x multiple by failing you in the audit, they then sent you a bill saying you owed them money for the client remediation, as high as $200,000 in some adviser cases (despite not having a loan to begin with), and to top it off, they said you cant work in the industry for 3 years.
2. With AMP’s statement above if they have only paid out $588 of the $828, so there is another write off next FY of $240m…?
Agree with everyone else, no matter how you spin it or what you dress it up with (young person doing their ad), this company will ALWAYS be the same. It needs to go to the dark Abyss.
The balance is the management costs, consulting fees etc. to manage the remediation project
Taking a reported earnings bath by impairing assets, ok.
What they did to their advisers was unforgivable. The advisers have their day in court in October, potentially a 900 million theft to be reconciled. Amp are where they are from their own doing. Critically endangered.What they did to their advisers was unforgivable. The advisers have their day in court in October, potentially a 900 million theft to be reconciled. Amp are where they are from their own doing. Critically endangered.
Case will go for years. Lawyers to pocket heaps, advisers either nothing or crumbs.
This has been going on for years and it’s still not going to court for another 8 months?!?
Yes, this is how the legal system works.
The sooner this organisation goes the same way as Enron the better. It also shows you don’t need to run a good bank to make a profit from money changing in this country.
Advice network reshape?
Ahh the old AMP trick of announce great underlying NPAT but against a net loss due to some abnormal events.
Huh? How did they go from +$356 to -$252 million? $608 in writedowns? Where?