Matt Lawler, Colin Tate and Pamela Hanrahan

AMP isn’t shying away from keeping a vertical structure to its business but is adamant the work it has done over the last few years separates it from worst case scenarios like Dixon Advisory.

The firm prioritised the distinction between product and advice, but won’t completely separate it, instead focusing on distinguishing each business element of the service process.

Speaking at the Professional Planner Researcher Forum Monday morning, AMP Advice chief executive Matt Lawler said it didn’t deserve to be compared to Dixon Advisory, which did nothing to move away from a deeply vertically integrated model in the lead up to its high-profile collapse.

“Through the work we’ve done and the decisions we’ve made, AMP owns verticals but we’re not vertically integrated – that’s an important distinction,” Lawler said.

“There’s nothing wrong with owning verticals, but when it is integrated to a point where it affects the very person you’re trying serve then that’s bad vertical integration and unwinding that has been important.”

Every part of the chain needs to be “excellent” at what it does, Lawler said, and service providers can no longer “rely on feathering each other’s pockets”.

“Advisers will advise their clients and they’ll charge for that advice,” Lawler said. “Platforms will deliver an administration service and they will charge for that and the fees will be transparent.

“The investment side will be paid for by the investments made and portfolios that are constructed and there will be no money that moves across any of the three businesses.”

Don’t associate us with Dixon

Dixon Advisory, perhaps the dirtiest words an advice business could be associated with in 2022, has put the spotlight back on vertical integration in the lead up the Quality of Advice review.

Lawler said Dixon Advisory is still the extreme end of vertical integration, which AMP is not close to.

“We can’t say Dixon’s is an example for the rest of the financial planning profession,” Lawler said. “To do that would be grossly wrong and underestimating the hard work done by the sector to make sure the model is clean.

“That model is so far away from what everyone has tried to change,” he continued. “It was really disappointing to see that was allowed to happen.”

What does “good” VI look like?