AMP CEO Francesco De Ferrari has defended changes to AMP’s buyer of last resort terms and declining adviser numbers, saying “there are lots of challenges going through the industry”.
A number of current and former advisers recently filed a class-action against AMP following its decision to reduce guaranteed values in its BOLR contracts from four times to 2.5 times revenue, as well as terminate 250 planners that were no longer profitable.
“This is amongst many of the challenging decisions we need to take,” Mr De Ferrari told ifa in response to a question on the matter. “The advice industry is disrupted, I think that is a fact.
“We needed to readjust our commercial terms linked to BOLR because they were out of market. We have done this in line with what our responsibilities and commitments were and so we feel strongly that our position is the right one, and we will defend it.”
Mr De Ferrari declined to comment further, citing legal proceedings.
He also defended AMP’s declining adviser numbers, with the wealth giant shedding some 270 advisers over the half.
“Our aim is to arrive at having practices that work with us, that are compliant, that are productive, and that are going to be professional in servicing clients,” Mr De Ferrari told ifa. “We have not put a number to what is the right number because this is driven by quality.
“My experience is roughly through these exercises, 30 per cent of the practices do not make it out the other end of these disruptions but the ones that do run much healthier and profitable businesses.”
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