AMP is now offering business coaching to help its advice practices adjust to the current advice environment according to David Akers, AMP Australia’s managing director of business partnerships.

Speaking to Professional Planner, Akers explains some of the measures the institution is taking to bring practices up to the standard set by CEO Francesco de Ferrari, who kicked off a three-year transformation for AMP in August 2019.

“A key aspect of our transformation program is to provide advice practices with business consulting and coaching services to help them adapt to the new industry environment,” Akers says. “So far we’ve supported more than 80 practices with these services and the support will continue in 2021.”

All of the 80 practices being serviced are being retained under the AMP umbrella, he added. “We’re delighted to be able to help practices achieve their full potential.”

AMP is entertaining a number of options for practices marked for exit, improvement or consolidation with larger “beachhead” businesses.

“It’s important all AMP’s advice practices are financially sustainable and able to support the infrastructure required to deliver high-quality, fee for service advice,” an AMP representative stated last week. “We’re working closely with practices that don’t meet this criteria, providing a range of options including potential mergers with larger, more financially secure practices.”

Ex-AMP advisers say not all practices are being offered business coaching, however.

One responded that their options were as follows; exercise the current buyer-of-last-resort offer at 2.4X multiple, seek appointment with another licensee or merge with an AMP Financial Planning practice (subject to AMP FP approval).

“We must be living in a parallel universe,” the adviser stated. “Business coaching was never offered.”

A welcome hand

For the advisers vying to make the cut at AMP, where de Ferrari has made it clear he will not carry practices that don’t meet the group’s internal benchmarks for success, the proffered consulting services will provide welcome guidance.

According to Neil Macdonald, who heads up AMP adviser representative body The Adviser Association (TAA), one of the benefits of AMP is that they’ve always had a strong range of coaching and services.

“I think coaching and business planning is a good thing, anything that helps you run your business is a positive,” he says, adding that most practices would source these services themselves if they weren’t provided.

Advisers have been stretched over the last year, Macdonald says, and taking care of clients’ concerns during the pandemic has made it hard to fine tune the practice itself.

“The amount of time and effort planners have to spend on day-to-day business means that they physically haven’t had the capacity to do other things,” he says.

A lot on the AMP plate

AMP remains the largest licensee owner in the country with 1,596 advisers under its umbrella at the end of 2020 according to HFS Consulting. This is set to change as De Ferrari trims the wealth division further and IOOF – the second largest at 1,245 – corrals advisers from the MLC network, which it purchased late last year.

While many of the largest licensees lost advisers this year in line with broader trends, AMP’s downsizing stands out. AMP Financial Planning was knocked off its perch as the largest licensee in the country by the SMSF Advisers Network in 2020 after losing 342 advisers for the year, a drop of almost 30 per cent.

The second largest decrease in numbers came from AMP’s other flagship licensee, Charter, which lost 129 advisers, or 22 per cent.

AMP has a lot on its plate, with de Ferrari taking strong measures to turn the group’s fortunes around after a bruising few years. The three-year transformation has already been marked by scandals, a looming court case from aggrieved advisers and a share price that seems to have settled on a nadir south of $1.60.

Ex-Sunsuper CEO Scott Hartley took over as CEO of AMP Australia last week, following the departure of Alex Wade last year.

US investment manager Ares Management has tabled a conditional bid for the company, with sources indicating due diligence is underway.

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