A number of buyers interested in AMP

Chief executive Blair Vernon said the intention was to sell it as a complete business.

An update on the sale process is expected at or before it reports its first half results in six months time.

The company says in its full year results to December 31, that the "divestment process is underway with a mandate to maximise shareholder value. AMP is in discussions with a number of interested parties and expects to provide a further update at or before 1H 20 results."

Vernon said the past year has been focussed on separating out the life business which has been sold to Resolution Life and also bringing onshore IT functions.

He says this will help the business be more responsive as the company previously had difficulty getting things done when IT was based in Australia with the parent company.

AMP’s KiwiSaver business had been experiencing some difficulties, Vernon said there were a number of reasons including a focus on anchoring IT, fallout from the Royal Commission enquiry in Australia and competition.

Also during the past year AMP’s financial advisers were unshackled from the company and most of them joined the new Wealthpoint dealer group, established by the AMP’s adviser association.

While this group wrote a significant portion of business for AMP, they are now able to recommend more products from other providers.

Vernon does not expect this change to have a material impact on AMP. He says in the past AMP had to compete for business from these advisers as the company ran an open sourcing arrangement.

Comments from our readers

On 13 February 2020 at 4:44 pm Pragmatic said:

Who & why? Kiwisaver?
Check out their Kiwisaver PDS... there are cheaper ways to obtain the management rights

On 17 February 2020 at 10:15 pm sara s said:

The recently slow death of AMP is a sign of market failure and government failure.

The business had very very poor quality management (current and previous - just look at the Royal Commission) and expensive and unwanted offerings.

So the market spoke as the business failed.

However for some reason the government gave 2 initial KiwiSaver default licences (1 for Axa and 1 for AMP). This act gifted amp a lot if KiwiSsaver customers they would not have picked up in a competive environment. So although the AMP demise has been slow it has been made slow and painful by the large gifted KiwiSaver client base keeping the dinosaur going.

Whoever failed to appoint the Axa execs to the key jobs destroyed a lot of shareholder value and left a lot of NZers in expensive AMP products.

On 18 February 2020 at 10:32 am Doggy said:

A sad history of their management believing in their own hype and superiority when compared to mere mortal provider companies.

I'm not sure what's actually going to be left now that all the family silver has been sold.

On 18 February 2020 at 2:08 pm Pragmatic said:

I want to put this as sensitively as possible... but to be honest its going to be a challenge: The history of AMP will no doubt be MBA fodder for many years to come, as a dominant financial services brand became complacent and arrogant during the height of their success. Don't be overly alarmed, as this has been occurring in many industries since the beginning of time...).

AMP had a chance through acquiring AXA to essentially become 'too big to fail', although let this slip away through the appointment of mediocre management who preferred the status quo rather than testing the way things had always been done. The net result is the situation that AMP enjoys today - with the only thing left, being valuable lessons for the NZ financial services industry to learn by.

Whilst not wanting to author a sermon, it's worth remembering some of these lessons:
1. things change quickly... make sure that your business is able to adapt (aka adapt or die)
2. employ people who are smarter than you - even if you don't like what they're saying
3. put the consumer first, and everything else will fall into place
4. look after your staff/colleagues, and hire-slow-fire-fast

I'm sure that their are many many more, however my brief interactions with AMP have brought these to the top of my mind...

On 19 February 2020 at 9:54 pm janet roberts said:

Indeed pragmatic. AMP is a great case study. It is run by a small group of largely white men for their benefit rather than for the benefit of shareholders or customers. How the regulator ever gave this business a licence (or 2) to be gifted KiwiSaver customers is beyond me, AMP products are expensive with little extras and it is amazing that regulators impose that on ordinary NZers.

The incompetence of current AMP management should be a lesson for the fourth estate. Journalists need to hold such incompetence to account.

Happy to lay a $100 bet that whoever acquires AMP will quietly let 100 per cent of current AMP NZ go within 12 to 24 months.

Hope the girth estate holds AMP mangement to account.

On 20 February 2020 at 6:35 am takapuna lad said:

Janet R
You make a couple of good points but not sure what white men is to do with this - agree though that AMP NZ is a case study in v poor management. I think you mean 100 per cent of execs will be let go. The lesson from AMP is that a business run with expensive products and arrogance has limited life.

On 20 February 2020 at 9:21 am w k said:

@pragmatic: #2 hits the nail in the head. Unfortunately, there are many who hire do the exact opposite because they feel threatened or intimidated by people who are smarter than they are. then, the ones they hire, continue the culture, and they sink company.

A number of buyers interested in AMP

AMP says plans to sell its New Zealand wealth management business are well under way and that it is in discussions with an unspecified "number" of parties.

Thursday, February 13th 2020, 1:55PM 8 Comments

Comments from our readers

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