AMP goals-based strategy inspired by US firm

ifa can exclusively reveal that United Capital, a California-headquartered registered investment adviser (RIA) firm, has been collaborating with AMP on goals-based advice strategies, as Australia's largest financial advice network tells investors this new approach is vital to its long-term growth plans.

An AMP spokesperson confirmed to ifa that the company has developed a cross-border relationship with United Capital over the past three years ahead of the revamp of its financial advice business.

“We undertook global research, looking for other like-minded companies adopting a similar goals-based approach," the spokesperson said.

“As part of this process we found United Capital. We have built a strong relationship with United Capital, sharing information and expertise. This continues to be beneficial for AMP and United Capital.”

ifa understands that the relationship is not commercial in nature and that no financial transactions have taken place between the two entities.

United Capital has undergone a similar strategic shift in recent years, investing US$10 million to develop an “industrialised” and “gamified” process for determining client goals and values. ifa witnessed a demonstration of United Capital's Money Mind tool on the Implemented Portfolios Study Tour in New York in 2015.

The RIA firm, which now has 74 offices across the US, is a leader in the financial life management (FinLife) movement that has sprouted among US independent advice providers as a reaction to the investment-centric approach of the Wall Street financial institutions.

The approach has been adapted in Australia by Treysta Financial Life Management in Sydney, whose executive director Mark Nagle seeks to pioneer a similar movement.

In an interview with ifa in late 2015, Joe Duran, United Capital’s Zimbabwean-born founder and chief executive outlined his vision for the global FinLife movement and how it differs from traditional wealth management.

“For the overwhelming majority of the history of our industry, advisers have believed that their job is to build their clients’ net worth,” Mr Duran said.

“[For financial life managers], our goal is not to maximise net worth but to maximise people’s lives.

“The false assumption of maximising net worth leads to fat wallets and unfulfilled lives. And that’s not something to be necessarily proud of.”

His comments bear similarity to those of AMP chief executive Craig Meller, who told an investor briefing last month that the institution is pivoting from being a financial product manufacturer to a customer-oriented business.