Alex Wade believes he knows where AMP needs to take its wealth business and how to get there, but despite his unwavering belief in the longevity of the once revered brand, Wade admits the company’s biggest challenge will be unhitching itself from the past.
Sitting at the top of the company’s CQ1 Circular Quay tower in Sydney’s CBD a week or so after AMP’s heavily anticipated strategy reset announcement in late August, the CEO of Wealth Management describes the steep mountain AMP has to climb.
“We were and we have been a very siloed organisation, which meant siloed around product. That’s a legacy we have to break so we can rebuild our focus on the client,” Wade says.
As part of the August announcement, AMP’s CEO Francesco De Ferrari said the group would be spending more than $1 billion on its wealth strategy reset, half of which it needed to raise from existing and possibly new investors at a time when its share price was trading at close to a dollar a share and its balance sheet remained in bits. The other half of the funding for its strategic reset would come from the sale of its insurance business to London-based Resolution Life, which has stalled at the last hurdle.
Being a client-centric organisation won’t come naturally to AMP, Wade alludes.
“If you’re in a client-centric business, you need services and product to meet the needs of the client and that has to be driven by the client,” Wade says, elaborating on his definition of client centricity.
“We do not necessarily need to manufacture product. We have product and we have good product which we are simplifying and making better for clients. But if we cannot deliver a product to meet client needs, then we will source it elsewhere,” says Wade, who was hand-picked by De Ferrari from Singapore-based Credit Suisse Private Wealth in January to take up the advice group executive position at AMP.
Choosing the right partners
Key to solving the puzzle of how to own and operate a large wealth business free from product subsidisation will be its ability to be selective about the advice partnerships it decides to invest in, as much as it will the advice practices it chooses to sever ties with and leave behind.
AMP has engaged big-five consulting firm KPMG to support its program of work with its sprawling advice network to make an assessment of the business’s strengths and weaknesses of practices, as well as make assessments on their more intangible future potential.