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Poor retention rates can be turned around: AMP

Low retention rates among financial advisers can be turned around with more mentoring and transparency, says Felicity Cain, adviser recruitment manager at AMP Financial Services.

Wednesday, May 29th 2013, 6:00AM 15 Comments

by Susan Edmunds

She told the Institute of Financial Advisers in Auckland that it was estimated that 10% to 40% of new advisers stayed in the role long-term.

A US study had shown just 16% lasted four years or more.

The FMA would like to build up the number of AFAs in particular, to cater for the growing KiwiSaver advice need.

Cain said AMP had done a survey between 2007 and 2011, talking to advisers about their reasons for leaving the industry.

The top reasons were a lack of mentoring, fewer leads than promised or expected, more evening work than anticipated, a difference of opinion on selling methods, too much paperwork or a partner who did not understand the demands of the industry.

Australian research had shown a lack of career progression, the search for better compensation or frustration with a lack of recognition were also reasons to leave, Cain said.

She said advisers hiring juniors into their practises were not articulating career progression options in a way they could understand. She said new advisers needed to be offered tangible benefits as they reached set milestones, such as an increasing shareholding.

She said communication must be provided on a continuous basis, and expectations that were created during the recruitment process needed to be delivered upon.

Cain said New Zealand advisers faced a struggle to hire juniors into the firm. Salespeople were the third-hardest job type to recruit, she said.

Just 34% of recruiters were successful in New Zealand, she said, compared to 46% globally.

But she said hiring rather than planning to sell the business at retirement was a good way for advisers to retain a level of control over the business they had built up.

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Comments from our readers

On 29 May 2013 at 9:22 am Mac said:
AMP's poor retention rate might also be caused by their decision a number of years ago to get rid of the local sales management structure. Out of interest, how many new advisers were recruited by AMP/AXA over the last 12 months?
On 29 May 2013 at 10:10 am AMPinsider said:
I'm surprised anyone in AMP management is making such comments...people in glass houses...
AMP continually overpromises and underdelivers to their advisers and they need to get that right first. Like putting on a conference, fixing their marketing, delivering on their remuneration terms, upgrading their technology, sacking useless middle management.
On 29 May 2013 at 11:32 am exAMPer said:
Ironic that AMP are discussing retention within the external salesforce when they are haemorrhaging staff due to increasingly poor management!
On 29 May 2013 at 11:50 am teddy said:
Are these statistics industry wide or AMP specific?
On 29 May 2013 at 1:55 pm Amused said:
Great comment Mac. In regards to your question about recruitment of new AMP advisers I would say the answer is sweet stuff all. I think the real question we should be asking here is just how many advisers have AMP themselves "lost" in the last 12 months?
On 29 May 2013 at 3:06 pm Stanley Running said:
I went to this session and it was very interesting and worthwhile. There is no doubt that succession and attraction of new advisers is something that most people have issues with, aside from the banks that have the massive scale.

So why we can wail on AMP, the reality is that as an industry this is the very real issue as to who will buy your client base/takeover when the time comes...
On 29 May 2013 at 4:35 pm Amused said:
@ Stanley Running. The comments above by readers aren't a wail on AMP. Far from it. They are born of our own considerable experiences of dealing with this particular insurer. Having an AMP adviser recruitment manager making comments about her employer's desire to do things right with advisers is farcical. We all know exactly where advisers rank on the AMP head office corporate wall chart. I think AMPinsider said it best - people living in glass houses.
On 30 May 2013 at 9:17 am john adams said:
Unfortunately they undervalue the fact that Advisers are people dealing with people and not spread sheets.
On 30 May 2013 at 11:10 am Dunedin old timer said:
Sure the speaker was good and feel for her if stuck in that org. We have all moved on. AMP is a dying but bloated business with poor fund flows and terrible insurance sales from FSC stats. The market has spoken just like with Blackberry.
On 30 May 2013 at 9:22 pm AMPmeltdown said:
Surely the speaker is on the money but unfortunately an AMP employee where even if one wanted to do something right would merely be ignored by the top management. If an adviser went with the code he can't possibly sell AMP.
On 31 May 2013 at 10:02 am Stanley Running said:
My point is that the AMP issues are industry wide and the reason the IFA field is getting smashed by the banks for recruitment and new business.

Yes I am sure AMP are not much fun to be associated with, but adviser recruitment across the industry is a pretty common issue as illustrated by the 40 or so grey hairs in this session.
On 2 June 2013 at 8:33 pm Frustrated said:
Will be interesting to see if AMP's new recruiting for in house advisers sail, car etc and then possibly 2 years go into an advisers practice - really if they last they would never leave a cushy in door position - only way they will get sales I guess seeing they have frustrated all other advisers.
On 4 June 2013 at 3:40 pm David said:
It takes a special person to be an adviser.As a sales manager responsible for recruiting new agents,now advisers,I must say that out of new recruits in the 1970's,80's and 90's over 90% had left the business before they were considered established (after 5 years in the business.In today's world many recruits from those days would not have survived the education required to become an AFA let alone prosper in the industry.This job ain't easy,it never has been and never will be with all the necessary compliance issues AMP may be bad but it still exists,where are all the others they scarped many years ago.
On 4 June 2013 at 3:56 pm Old Timer said:
Totally agree with Mac and Amused. AMP's management has never been a big supporter of its adviser force. Some have admitted this publicly that they don't even like attending adviser conferences. Recently it was announced at AXA/AMP superannuation meeting that they were soon to provide inside staff with a 12% contribution to their KiwiSavers. What are the advisers getting??? 2 Regional conferences & overseas trip which if you are working to the Code, your chances will be zilch!
On 21 June 2013 at 12:04 pm Selwyn said:
Interesting comments! It sounds like the industry needs a "life Insurance Sales and Business School". As an adviser your running your own business. Perhaps 'selling' it as that may make a difference!

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