Average Aussies shouldn’t need full scale advice, says AMP
AMP chief executive Francesco de Ferrari says an ‘average’ Australian on an $80,000 annual salary shouldn’t be paying a full-time adviser on a recurring basis.
Speaking at the Morningstar Individual Investor Conference in Sydney last week, Mr de Ferrari told the largely investor audience that it needs to enable a different way of providing advice to customers as part of the restructure of its wealth management business.
He said it would take at least three years to “re-position the business”.
“That’s where we need to work on transforming some of the DNA – improving our execution and driving a lot of accountability in how we deliver,” Mr de Ferrari said.
‘Modular’ advice delivery
In particular, he said AMP has been looking into the concept of ‘modular’ advice as a critical element of its restructure, whereby advice is provided only at critical life stages as well as considering whether that advice can be supported through technology.
“If we are honest about making wealth accessible to all Australians, then we have to find another way of delivering it, because face-to-face advice is very expensive. [For someone] on an average of $80,000, they will not be able to afford or shouldn’t pay a full-time adviser on a recurring basis,” Mr de Ferrari said.
“[We’ll look at] how we use technology and how we move effectively towards a more episodic advice where it’s clear to me that one size doesn’t fit all, and where we need to give clients the opportunity to buy and pay for advice when and how they need it.”
Reaching the core of client needs
The other critical element, according to Mr de Ferrari, was around getting to the core of client needs rather than simply selling products.
“I find it very interesting that when I hear people talk about wealth, they normally they talk about superannuation and how they’re investing that piece of your wealth for their retirement,” he said.
“Actually, that is not the real question. It’s very hard to talk about retirement but only talk about super. Because as you see, superannuation is only 18 per cent of your money on average in Australia.
“All of a sudden you’re trying to build a company around client needs, you realise that actually just focusing on super is not going to be enough. You really have to look at what’s the overall picture and where effectively does advice help.”
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