Speaking on a recent episode of the ifa podcast, Steve Prendeville, founder and director of Forte Asset Solutions, said that AMP has made strides in reshaping its business, but time will tell if Insignia can do the same.
“The first part is that they’re two different stories. They have one thing in common and that suppressed share price and has been for some time,” Mr Prendeville said.
“But what we’re seeing with an AMP is a reinvigorated management with the appointment of Alexis George and also particularly Matt Lawler, and it was Hail Mary. He had to turn the boat completely around and I think that they did that.”
However, the recent ruling in the Buyer of Last Resort (BOLR) scheme class action and AMP’s subsequent appeal was met with dismay by many in the advice community.
In July, the Federal Court of Australia ruled in favour of advisers in the class action filed against AMP’s subsidiary, AMP Financial Planning (AMPFP).
AMPFP filed a notice of appeal in September, which led to The Advisers Association (TAA) chief executive Neil Macdonald slamming the decision.
“We are extremely disappointed that AMP has chosen to appeal what was a conclusive judgement by Justice Moshinsky. We genuinely believe His Honour already took all the matters raised by AMP into consideration,” said TAA chief executive Neil Macdonald.
Mr Prendeville said despite the negative sentiment created by the appeal, the turnaround of the business has still been impressive.
“They were in a really hard position. They were going to lose whether they appealed it or not. But what they’ve done over the relatively short period of time is they’ve actually restored some of the trust and confidence of the advisers that are there,” he said.
“They’ve opened up a more open architecture. Vertical integration is gone. And I think that there’s a belief that’s been growing within there. So I think AMP, yes, there’s been a recent setback, but I think above all, those that are still there are still yearning for the culture that they once had.”
On the Insignia front, the firm is in the early stages of what could be a similar turnaround, depending on the outcome of its new leadership team.
In October, longtime Insignia CEO Renato Mota announced he was leaving the firm after 20 years at the end of February 2024.
“Having established a clear path for the next three years, I feel this is the right inflection point to provide the business with fresh perspective to continue the journey,” Mr Mota said at the time.
“To have created an industry leader and purpose-led culture, driven by an ambition to improve the financial wellbeing of all Australians, is something I’ll always be proud of.
“I know I will leave behind an incredibly talented and passionate team who will continue to build the organisation for the benefit of all stakeholders. I thank all of our people for their friendship and support and wish them all the very best.”
Mr Prendeville said that Mr Mota’s departure will create a “management void” that will need to be filled to rebuild its damaged culture.
“Their numbers, I think, where you’re seeing them disappear is really from the acquisition of ANZ businesses and MLC,” he said.
“Again, I think it comes down to culture, in that they’ve brought together multiple dealers and licensees and put them in all in one, and its culture has been in some ways destroyed in many cases. Yet what advisers seek is that collegiate culture … plus they want leadership. Many of them are also in there because of the industrial strength of compliance.”
While noting that AMP and Insignia are at different stages in their efforts to reshape their businesses, Mr Prendeville said they both still have work to do.
“I think that each has their own issues, each are fighting for relevance and I think that it’s all about culture and whether they can keep the culture or create a new one is the key part of the management risks or challenges they have,” he said.
“I think AMP is doing it well and I think that it’s a little bit unknown on Insignia and we’ll probably still see some leakage, probably from both, but most of the leakage of AMP has happened and Insignia, it’s still on a watch list.”
Mr Prendeville added that the technology front could be the biggest challenge for the management team that takes over Insignia in 2024.
“I think Renato, given his length of tenure that he’s had within the organisation and also the energy that he’s brought with it, I think that he’s done exceptionally well,” he said.
“The difference between the two is AMP has a really good platform with North and whilst they’ve spoken about improving technology with Insignia, I’m not sure that that’s yet been delivered on.
“I think that the new management that comes in, it needs to continue what’s been started because there is momentum behind it. I think Renato has done a really good job of it. He’s built the largest business on the advice side and so, yes, there’s challenges, but it all comes back to management and particularly cultural management, that will be the determinant from success or maybe failure.”
To hear more from Steve Prendeville, tune in here.
Absolute hogwash. AMP circling the drain.
By what stretch of the imagination could AMP be described as thriving?
Adviser number dropping like a lead balloon, still unresolved BOLR action, high net outflows, constant stealth redundancies and a share price of 86c.
This baby should be thrown out with the bathwater!
I don’t know where Mr. Prendiville gets his insight. “My North a really good platform” I don’t know how many clients he has on it or how often he uses it. But it wasn’t my experience compared to likes of HUB24 And I know after talking to principles of AMP equity firms they are beyond disgusted with AMP appealing the BOLR decision. And they believe the culture has not change! I guess it’s a matter of perspective.