AMP is close to announcing a new leadership structure for its ‘aligned’ advice business culminating in a recruitment process drawing on both internal and external candidates as advisers continue to exit the group.

At this stage there is no plan to merge or subsume the three licensee brands – AMP Financial Planning, Charter Financial Planning and Hillross – it is understood. AMP Advice (previously ipac) will continue to be run separately as AMP’s salaried adviser network.

AMP’s three licensee brands have been at the pointy end of the company’s plan to “reshape advice” which kicked off in August last year when newly anointed CEO Francisco De Ferrari told advisers that their existing buyer of last resort (BoLR) arrangements would essentially be halved to reflect market value.

In the last 12 months some 640 authorised representatives have left AMP’s aligned advice businesses, a more than 26 per cent reduction in the group’s practice-led advice footprint, the Financial Adviser Register reflects. This scale of attrition is in line with the company’s disclosure in February during its results announcement that 440 advisers exited the group the second half of last year.

AMP’s adviser attrition is expected to continue with $228 million set aside for BoLR payments which are expected to settle in the 12 months from February 2020, the company’s public disclosures reflect. This could represent another 330 advisers leaving the business during the period, based on average client book sizes and recurring revenue calculations. The business disclosed $86 million in contingencies for loans to advice businesses it is unlikely to recoup in its last financial statement.

There are currently approximately 1778 authorised representatives within AMP’s aligned advice business, comprising of AMP FP (1020), Charter (517) and Hillross (241), public information shows. This number is down from approximately 2414 ARs within the network at the start of 2019. The percentage of advisers to have exited the three respective brands in the last 18 months has been in the range of 23 – 27 per cent.

AMP has declined to comment of the ‘natural size’ of the group’s advice network and has consistently said during its restructuring process there is no predetermined number of advisers who will remain with the group.

The next phase

Now is the time for the business to set up the “next phase” of its strategy to reshape its advice business, an AMP spokesperson noted.

The company declined a request for a broader interview but described financial advice is a “core element” of the company’s overall strategy.

“We’re making good progress on the advice reshape with almost all practices having now chosen their preferred path forward, with some able to merge with other practices,” the spokesperson said.

AMP is now in the middle of a recruitment process for a new managing director of advice and a chief advice officer to report to David Akers who will continue to lead the aligned advice business. Akers reports to head of AMP’s wealth business, Alex Wade. These positions will bring the operations and leadership of the three brands closer together with the structure to direct a single service proposition, technology and compliance across the three brands.

Overall, the sale of its life insurance business in the last week has given the company some breathing room with an additional $1.1 billion of cash in the bank after drawing on its cash reserves over the last year and a half to fund ongoing remediation programs, particularly relating to its advice and wealth business.

The company is expected to have completed 80 per cent of its client remediation program by the end of the 2020 calendar year and to date has spent $264 million on repaying money to clients and costs associated with the program.

Smith is the editor of Professional Planner’s print and digital platforms. He is an experienced financial journalist, editor and multimedia producer who has held senior editorial positions both in mainstream press and trade media.
One comment on “AMP advice plan reaches next stage, exodus continues”
  1. AMP might need to simplify their compliance processes rapidly or the exodus of experienced advisers may very well escalate.

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