AMP ‘stands behind’ troubled advice business

The embattled institution has released a Q1 update ahead of what is expected to be a heated annual general meeting in Melbourne this morning.

In a statement, AMP interim executive chairman Mike Wilkins acknowledged that the royal commission has been “exceptionally difficult for [AMP] customers, shareholders, employees and advisers”, and pledged allegiance to its ailing advice network.                                     

“AMP stands behind its advice business and the value it creates for customers,” Mr Wilkins said. “However, we have been very disappointed that, in some instances, our customers have not received appropriate levels of service for the fees they have paid. We are working hard to accelerate the remediation for our customers.”

AMP remains Australia’s largest financial advice provider, but analysis from Bell Potter Securities indicates the network is haemorrhaging, with more than 70 individual advisers leaving AMP licensees since the beginning of 2018.

The company has also confirmed that two class action lawsuits have been filed by litigation firms on behalf of shareholders and says it will “vigorously defend the proceedings”.

The Q1 update lists a number of financial metrics ahead of the AGM, which Mr Wilkins said indicates the company is “well-capitalised” and has areas of “strong growth”.  

However, the results also indicate that total wealth management AUM was down 2 per cent to $128.3 billion at the end of the quarter, which is attributed to a negative investment market environment.  

The statement said that board renewal and the appointment of a new CEO are top priorities alongside customer remediation.

Earlier this week, three board members left AMP following the appointment of former CBA chief executive David Murray as chairman.

Westpac chief executive Brian Hartzer also made comments this week confirming his organisation's commitment to its wealth management and financial advice business.

By contrast, NAB has announced it will seek divestment from MLC, including its financial advice licensee network.