AMP plans 'investment renovation' and big changes to AdviceFirst
In its 2020 Investor Report, AMP have confirmed plans for a sweeping “investment renovation” as well as widespread changes to AdviceFirst.
Tuesday, February 16th 2021, 12:06AM
As well as reporting that a buyout offer from global asset management firm, Ares has been taken off the table, the 2020 report from AMP has also revealed that major changes are planned both in investment and AdviceFirst.
Documents released alongside the 2020 financial results, show that AMP plans to complete an “investment renovation”. The details of the renovation largely respond to the previously reported KiwiSaver asset reallocation to passive investment managed by US company BlackRock. This poses the question of whether this move from active to passive investment will continue to grow as a strategy for AMP in the coming year.
There are several changes coming for the AMP advice wing, AdviceFirst. Off the top the report states that “As part of the AdviceFirst strategy to grow scale and reach, one advice business was acquired in FY20 while organic net cash flows improved A$129 million on FY19.”
But while one advice firm was acquired the number of total AMP advisers fell from 62 to 57 during 2020. Of those advisers, AdviceFirst currently has 34.
Despite this, advice seems to be key in AMP’s plans moving forward, particularly in Australia with the report stating that as part of their re-inventing wealth strategy “practice exits delivered to plan in FY20 with the programme now 75% complete. During FY20, approximately 85,000 advice clients were transitioned to new Annual Advice and Service Agreements.”
The report said that “New Zealand wealth management NPAT [net profit after tax] of A$36 million declined A$8 million from FY19 due to the proactive closure of two legacy schemes in 2H19 and the impact of Covid-19.”
All of these have had consequences for the position of AMP Capital. Its AUM fell to just under A$189 billion at the end of 2020, compared to A$203 billion plus 12 months previously.
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