AMP announced its full year results this morning, also using the occasion to announce a reduction in adviser numbers.
A media statement accompanying the results claimed the reduction was the result of corporate strategy and retirement, rather than exodus from its advice channels to others.
“AMP deliberately reduced adviser numbers in 2016 by tightening the classification of authorised representatives,” the statement said.
“A higher-than-usual number of advisers also decided to retire or leave the industry in the face of challenging industry conditions and increasing education and professional requirements.”
While the media statement did not provide any specifics on the overall adviser numbers, an investor briefing document provided to the ASX reveals an overall drop of 14 per cent, with 3,519 advisers, down from 4,091 this time last year.
AMP has seen significant reduction in numbers across all of its major dealer groups, with AMP Financial Planning down 7.7 per cent, Hillross down 7.2 per cent, Charter down 19.9 per cent, ipac down 5.6 per cent and SMSF Advice down 37.2 per cent.
The AMP Horizons Academy has also seen a 25 per cent reduction in the size of its student body, while the Jigsaw Support Services business – a consultant to the self-licensed advice sector – has seen its number of contracted IFAs drop by 54.6 per cent.
The announcement of a change in approach to authorised reps from AMP – first reported by ifa – followed off-record comments suggesting the institution sought to turn accountants operating under an SMSF Advice limited licence into fully-fledged authorised reps in order to be more successful product pushers.
The major reduction in adviser numbers in 2016 follows the collapse of the Genesys Wealth Advisers dealer group in 2014. At that time, ifa predicted significant further exodus from the AMP network.
AMP also reported overall net loss of $344 million and underlying profit of $486 million, relating primarily to continued problems in its wealth protection arm.
The institution also pointed to “strong performances” by AMP Capital, AMP Bank, the New Zealand financial services business and the “Australian wealth management” business, which it said was “resilient in a volatile market”.
Hopefully they are also getting smart about throwing overboard advisers that were not servicing their customers and didn’t want to grow. These practices were / are trashing their brand. The underlying challenge is that the dealer group thinks it is servicing independent practices, and their practices think they are independent, at the same time as BOLR is offered. The reality is that the dealer group struggles to make it clear that AMP owns the customer and the dealer group struggles to send the message to its network about what is expected and the consequences of not servicing all clients. The upside is that the mantra of unrestrained growth has been abandoned, either be design or by circumstance – which is much more likely. The question now is how they use this opportunity to deal with the above
Business models are changing. At some point AMP will concentrate on product manufacture.
AMP advisers I believe have left AMP due to 1. Educational standards been risen by AMP across its adviser network and 2. Due to AMP practices paying almost 50% lower base salary than banking Advisers.
Hopefully all the bad eggs are leaving say AMP and only the good ones will remain.
The AMP financial planning culture is a mix of two extremes. Sleazy sales people and heavy handed compliance bureaucrats. Working in that environment is like revving a car flat out with the handbrake on. Sooner or later your engine burns out.
This industry is a joke. An absolute circus.
I bet you they are they still paying out their volume bonus’s …….umps sorry marketing allowances to hang on to the rest of them , no conflict of business interest there !!!
We all know what’s really going on here. Dress it up how you like – but the market is smart enough to understand that AMP and other large Instos are losing relevance .
True. But there is something deeper wrong within AMP surely. Why would 20% of Charter advisers leave? These people are used to a large insto vertically integrated model. There is a major cultural problem within AMP and that must come from their “arrogance” that they are the biggest and their insulated world “the best” belief. Hopefully this bad news will be AMP’s wake up call that they have start to work with their advisers not dictate to them.
Just look at what they are taught in the horizons program and you have your answer.
Also, they recently made a big deal of starting to provide ‘goals based advice’… That’s just admitting all they have done previously is flogged product.
Mark, Anonymous, RT and Reality: you all raised interesting points. But this reduction in AMP adviser numbers is easily explained.
1. The requirement for higher education completion (CFP, Masters,etc.) by 2019 has seen a lot of older advisers move on via succession to younger planners (those these older planners may stay a practice principal, etc.) as opposed to studying as an 55+ year old. This would especially be the case for AMPFP, by far the sales engine of the company (biggest number of planners Australia-wide).
2. Couple 1 above with new reduced BOLR terms announced early in 2016 saw a lot of one or two person practices take the very guaranteed no fuss price for their practices, if they agreed by a certain date they got the previously agreed more generous BOLR terms. An AMP exec said to me, “I can’t understand why they all didn’t take up the old BOLR price, it’d be like someone saying I’ll buy your house for $1m today, but tomorrow it’s worth $500k”.
3. Charter, primarily the leavers were the old Genesys practices after AMP got rid of that brand, a business that had had a few owners over the years that very few rated as it was created as a missmash of old life insurance agent businesses. AMP, as like most big players, are seeing life insurance as a troublesome profit/equity eroding business units and the adviser in a post LIF world will die out.
4. IPAC, normal staff turnover of 15%.
5. SMSF Advice, AMP’s attempt to lure accountants to full licencing to their now market dominant SMSF administration. No biggie. 40% of bugger all is bugger all. They learnt that trying to herd stray cats was a time wasting exercise.
6. The reduction in Horizon Academy numbers: who wants to be a financial planner these days?
7. Jigsaw: See point five.
In conclusion, wait till next years drop in AMP Adviser numbers. It will be bigger than this year especially focusing on points 1 and 2 above.
Good discussion. But point 3 is not complete. Most of the Genesys advisers left prior to being forced into Charter / AMPFP. AMP has been experiencing a worrying exodus of the “exisiting” Charter camp which is why I query the cultural aspect of AMP.
RT: Yep your right there re Charter. I think the exodus is that AMP won the AMP v National Mutual (AXA) war in the end. That would have peed off a few ex-AXA planner groups and planners.