AMP chief executive Francesco De Ferrari fronted the House standing committee on economics on Thursday, copping questions about the recent sexual harassment scandal and adviser unrest amid the group’s BOLR (buyer of last resort) changes.
Committee chair and Liberal MP Tim Wilson, Liberal MP Celia Hammond and Labor MP Anne Aly all referred to emails they had received from AMP advisers, complaining about the BOLR reforms and the group advertising vacancies for new advisers.
Dr Aly asked Mr De Ferrari to confirm if AMP is currently in the process of recruiting advisers, to which the CEO said he did not know.
“I would need to come back to you. Our key focus currently with our advice business is to make sure that we work through remediation, that we define how to set up an advice business that is fit for the future, where we can provide accessible, professional and compliant advice to more clients and we are working significantly on improving technology, migrating our clients to annual agreements” Mr De Ferrari said.
“In … our network reshape, you would have seen the number of our advisers effectively come down.”
But Mr Wilson intercepted, having opened AMP’s website and seeing the group has advertised advisers can join its network.
“I guess in any type of commercial salesforce you would always look for renewal,” Mr De Ferrari said, after Dr Aly asked him to comment on the adverts.
“We need to bring in new talent, there are new professional standards that are being applied with FASEA. And so I do not see anything incongruent with the fact that as you try to transform an industry you need to bring in fresh new talent as some of the older practices effectively leave the industry.”
AMP shed 270 advisers during the first half of the year. In 2019, 440 advisers left the group.
The group started to give marching orders to advisers a year ago, as it signalled it would be reducing its network. Hundreds were said to receive a termination letter in August 2019.
“My question is based on communications that I and other members of the committee have had from people who have had their practices terminated, who are now asking, how many have you terminated and if you terminated however many that is, why are you now advertising for new ones?” Dr Aly said.
Mr De Ferrari answered, “In a commercial network, you’re always looking to bring in new resources.
“It would be the same with employees.
“The fact that we actually have employees leaving the company shouldn’t mean that we shouldn’t be out on the market hiring new ones.”
Dr Aly fired back, saying, “I wouldn’t terminate an employee if they were doing a good job and then advertise for a new one, would you?”
Mr De Ferrari said no, but the group is still looking to reshape the advice business to make it viable.
“We analysed all the different practices, how they meet professional standards, how they meet compliance, how they’re running a sustainable practice, and some of these practices are really not sustainable,” he said.
“And so for us, it’s an issue of giving people the choice. We have actually given people lots of different avenues: they can sell the business back to us, they can go and join a competitor or a different practice, they can merge with another practice within our own network. We have proposed a whole series of options and solutions for them to choose.”
The MP asked what the group is offering business owners who have “invested their lives” into their practices, to which Mr De Ferrari referred to the options again.
Businesses that are made up with one or two advisers will not be able to survive the coming industry reforms, the chief warned.
“It’s been my experience where I’ve seen this in a number of other countries,” he said.
“Because of the compliance standard, the need to invest in technology, the education standard and all the other disruption that’s coming doesn’t really make a one person practice very sustainable.
“So, that’s where we’re asking people, if you want to continue to do this job because it’s your passion, you can try to merge with another practice. You can sell your book back to us and we can on-sell it to somebody else or you can find a new home if you actually want to continue this by yourself. So, we’ve given them all the options possible.”
A number of AMP Financial Planning advisers launched a class action against the wealth giant in the Federal Court in July, regarding the BOLR policy changes.
Where does this guy get off? When will he realise it’s his turn to hand in his resignation? AMP is just a merry-go-round with different monkey’s on the same fake horse’s, all peddling for the ring master to show the spectators his side show. It’s a scandal that should be closed down for everyone’s sake…..just look at the history of the share price to see what hard nosed investors think of them! The AMP bus is heading for the cliff which is getting closer and closer!
I am one of the planners they forced to stay with them and I have been told I have no Option to leave , where’s my different pathways!, you think they might have learnt that the constant lies doesn’t work …….. rotten to the core!!!!
That’s pretty bad if you were held to ransom. What were your circumstances as a “retain”?
Did/do you have practice debt, trigger BOLR and then have to withdraw it given the (supposed) reduced multiple and valuation adjustments?
I was in a similar position. I found a way out via the use of a lawyer.
AMP what an embarrassment and dysfunctional organisation. Who would want to work for that cesspit?
I love how he calls their advisers a ‘commercial salesforce’.
He doesn’t even try to hide it. Vertical integration at its finest, which was apparently not a problem in the RC.
Very, very well spotted. That comment could portend a lot of trouble for AMP. Clearly they want higher producers and culled lower producers.
Yep. The only recommendation to come out of the RC should have been to ban vertical integration. Sadly, lawyers felt the need to overcomplicate it.
Worse, they explicitly allowed it. Lots of useless recommendations and the one that mattered was allowed…
Yep and because of Vertical Integration we are drowning in BS REGS that are designed with the past Banks sales forces & ASIC to try to make it smell like real advice and not product sales.
Now ASIC will hold onto Vertical integration dearly as their best buddies Industry Super are moving into the old Bank / Vertically Integrated Advice Sales force space real quick.
BAN VERTICAL INTEGRATION AND ADVICE REGULATION HAS A CHANCE TO BECOME A SUCCESS.
Left that turkey shoot, sausage sizzle, ma and pa Kettle, mickey mouse operation long ago. Could see the writing on the wall.
Maybe I’ll rejoin, sign up to buy clients, then have AMP renege on a contract and shift the goal posts again further down the track????
From AMP’s website: “Whether you’re a driven graduate or an experienced financial planner, AMP may have an opportunity for you.”
Have we got a deal for you.
Does anybody know whether those advisers who ‘found a new home’ whether they could take their clients with them or whether AMP continues to consider all adviser clients to be AMP’s clients and not the adviser’s clients?
they could take their clients
Thank you.
At what price, the old top BOLR price I bet ???
The answer to that question is not as straightforward as you think.
Firstly you need to participate in all audits that amp dreamt up. Then you need to remediate any clients amp thinks you need to remediate from your own pocket.
Then you need to clear any debts you have with amp bank.
Maybe then you will be allowed to go and take your clients
I hope the karma bus hits De Ferrari hard. I’ve told me daughter to apply for a job with AMP to take over the clients they are forcing me to hand back to them for less then what they sold them for. I’m sure they will do the right thing by her based on their track record.
You are an ignorant man De Ferrari. Many of the exiting practices are extremely talented younger advisers with small practices that are not viable anymore due to the ridiculous over compliance. They would be excellent recruits. To say they want new talent is offensive..
How else are they going to service all those clients that were [s]stolen[/s] purchased back under BoLR terms? Put on more employed advisers of course! AMP having their cake, and eating it too!
Who in their right mind would go work there?