A number of AMP Financial Planning practices have recently sold their corporate superannuation books back to AMP under Buyer of Last Resort arrangements, as the value of corporate super businesses suffers due to the Future of Financial Advice reforms.
A spokeswoman for AMP said it was not uncommon for financial planning firms to review and change their focus.
“We get practices coming to us wanting to increase their corporate business while others want to move away from it. Corporate super is the first point of contact with AMP for the majority of customers, it’s always been an important part of the business and we see it as a significant growth opportunity for planners and for AMP.”
David Murray, principal at consultancy Peloton Partners, said changes to legislation made it difficult to accurately value corporate superannuation businesses, with some practices better than others at handling day-to-day member enquiries and capturing opportunities to sell holistic financial advice.
“I don’t think anyone knows exactly what corporate super is worth because of the legislative uncertainty but if a client doesn’t know what they’re paying for and they’re not getting much service for what they’re paying, then [that business] is not worth anything anymore,” he said.
“There are some corporate super business models that work, and for some businesses, corporate super is a profitable component of their business which also allows them to be front of mind for members if a financial planning situation arises, such as coming into a large inheritance.”
Murray said there was still demand for quality corporate superannuation businesses.
AMP Corporate Super experienced net cash outflows of $128 million, in the third quarter to September 30, 2013 (the latest published data), compared to net cash outflows of $116 million in the same corresponding period in 2012.
