The Advisers Association chief executive Neil Macdonald told ifa discussions between the adviser body and new AMP managing director of advice Matt Lawler – whose appointment was announced in May – commenced before Mr Lawler took up his position.
“We had two or three meetings a week with the board to consult on the changes, and I think it’s fair to say what was delivered on Monday was significantly different to what AMP was talking about earlier in the year,” Mr Macdonald said.
“The original discussions that AMP were having with planners was a much higher fee for ARs and for practices, a bigger minimum so it would be pricing two-planner practices out of market in terms of competition, the caps were bigger and the glide path on numbers of ARs and the fees were different as well.”
Mr Macdonald said the association had canvassed its membership on their top priorities when it came to developing a new licensee offering.
“We did a survey of members in May and said what are the top five things you want out of this – things like removal of institutional ownership gives them choice so it’s important,” he said.
“We wanted to make sure anyone who hadn’t put their BOLR notice in could do so and still get it, and we wanted a competitive offer – we accepted that other licensees have been putting pricing up for the last two to three years and AMP hadn’t.
“The other things we’re keen on is a reset of advice policies to make them simpler to follow, getting the tools and technology to make advice more efficient and making more contemporary product and service lists – those have got a roadmap with dates and times against them, so I think overall it’s a good outcome.”
Mr Macdonald said the release of client ownership to advisers was a key part of the new strategy, giving advisers both the freedom to get a better price for their business on the open market and to refinance internal business loans that have historically been tied to BOLR value.
“If you look at the market now, the likes of Steve Prendeville are saying there’s a shortage of businesses for sale and they’re achieving three times [recurring revenue], so why would you go BOLR and get 2.5 times when you can sell it on the market for 1 January for three times,” he said.
“Between now and the end of the year, they will also release new agreements so you don’t have to go to AMP Bank to lend you money – NAB will lend you money, Judo will lend you money, you can use external parties. From 1 January you own the client, so you can go to any bank who does lending.”
Mr Macdonald said the fate of terminated planners who had exited the wealth giant on less favourable terms was also still on the association’s agenda.
“The class action is still going, and in our discussions we’ve said that is still there and we need to have a conversation about that at some stage,” he said.
“Our position has always been that we prefer to negotiate an outcome rather than take legal action, but we don’t think they will look at that until Alexis [George] starts and they start thinking about what they want to do.”
the end of “hotel California”
Surely all the decent AMP practices have jumped off this sinking ship by now. AMP are rotten to the core.
Once again Neil and the team have been fighting hard for AMP advisers. Makes me wonder why they’ve been getting such a bad deal from AMP
Something called institutional ownership or handcuffs perhaps…?
Not sure if you’re being facetious or not, but either way AMP advisers got an extravagantly good deal from AMP for 20-30 years. It was totally unsustainable, and had to end with a hard crash or a cushioned fall. They have done well to escape with a cushioned fall.
Unfortunately the later arrivals experienced far more of the bad than the good, but by the time of their arrival they really should have seen the writing on the wall and stayed away.
Yes, exactly. It was obvious to me as a newcomer to the industry in the early 2000s.
Why would you want anything to do with AMP?