New AMP managing director of advice Matt Lawler is under no illusion about the problems AMP has had, still has, and needs to work through.
But the group has a special and historic place in the Australian advice landscape, he believes, and with the right direction it can once again be an industry leader again, even standing “shoulder to shoulder” with other licensee owners in lobbying policymakers and regulators for appropriate industry settings.
“One of the reasons why I took this role is AMP is one of the only remaining iconic brands when it comes to advice,” Lawler said on Tuesday morning during a panel session at Professional Planner‘s Best Practice Forum.
“Today that brand is tarnished and needs to be rebuilt, but I always saw a place where AMP could be that national educator, could be that national voice for what advice is all about,” he said.
On Monday Lawler and AMP Australia chief executive Scott Hartley announced a suite of reforms aimed at taking the “handcuffs” off advisers and positioning the wealth giant for the post-royal commission era, including the end of both institutional ownership of advice clients and buyer-of-last-resort agreements.
In tandem, the group outlined its new “advice-led” licensee service proposition and a new fee arrangement built to accommodate the end of product subsidies.
According to Lawler, the resurgence of AMP Advice – the second largest network in the country with over 1300 adviser and 400 practices under its umbrella – will be a win for the industry.
“A lot of people have said to me since I made the announcement that they’re really pleased or they’re happy with it because they actually want AMP to do well,” he said. “A healthy AMP is important to the ecosystem.”
As an industry leader, AMP Advice can stand together with other large AFSLs and go to policymakers and regulators with a “united voice”, he said. Advice has gone through a major “compliance phase” on the back of the royal commission, he explained, and the regulatory pendulum has probably swung too far.
AMP has the opportunity to be a “national voice” to lobby for reform, he ventured, adding that one thing he learnt in his previous role as chief executive at national broker Yellow Brock Road was the value of standing together.
While charting a path for AMP Advice to move forward, Lawler also candidly address the problems that have plagued the group in the past.
While he demurred on questions relating to the ongoing court case from an adviser cohort aggrieved by the group’s reduction in BOLR payouts, Lawler was direct about the need for AMP to shed its product-led roots.
“This is a major step in AMP becoming an advice-led business and really jettisoning the history it’s had in terms of that distribution-style model,” he said.
For 170 years AMP Advice has been linked to a “tied agency force”, he continued. That link was “always there”, but now the group is intent on moving to an “aligned advice force” in line with the industry’s growth towards a professional model.
That’s where the new suite of reforms come in.
“Removing some of these things like institutional ownership where the advisers couldn’t take the clients if they wanted to leave, as well as the buybacks, which is an unofficial way that companies have valued business… if we take those away it puts more control with the advisers and it allows us to deal with the advisers on a professional basis…
“That’s a really important cultural change,” he said, “as opposed to relying on handcuffs or penalties.”