AMP suffers major adviser exodus amid self-licensing trend

New data from research firm Wealth Data has revealed a deepening adviser exodus at AMP, where the number of advisers has fallen to 998.

This compares to AMP’s pre-royal commission adviser count of 2,474 and sheds light on the impact Kenneth Hayne’s damning final report had on the once wealth giant.

AMP’s network of financial advisers first dropped below 2,000 just over two years ago.

The firm was at its prime in 2014, when it boasted as many as 3,329 advisers, but a sudden pivot in late 2017 began a steady decrease before the Hayne royal commission opened the floodgates.

Speaking to ifa, Matt Lawler, managing director of advice at AMP Limited, said AMP’s advice network has undergone a structural evolution over the past few years which parallels the changes seen in the broader market.

“AMP has been deliberate through its recent reshape program to align itself with high-quality financial advice practices. Our focus is to partner with practices that are committed to, and in AMP’s view are capable of, making necessary changes to be a part of a new era in financial advice — an era that is product-agnostic and focused on delivering advice that is in the best interest of the client,” Mr Lawler said.

“Today, AMP’s model reflects that of a professional services provider to high-quality financial advice practices of which licensing is one part.”

Mr Lawler pointed out that while fully licensed financial advisers number 998 in total, in addition there are 96 financial advisers who have moved to their own AFS License and remain customers of AMP via a services agreement, making it 1,094 financial advisers who continue to partner with AMP.

“This trend for self-licensing is a broader trend in the market.”

Advisers opting for self-licensing

Commenting on AMP’s data, director of Wealth Data, Colin Williams, reflected on the difficulties faced by licensees across the board.

“Advisers are leaving advice and others are opting for self-licensing,” Mr Williams said.

“At least AMP is still around as opposed to the banks that simply gave up on providing personal advice,” he added.

Overall, there was a significant contraction in the number of advisers listed on ASIC’s database from 16,352 to 16,203 in the week ended 29 September.

Mr Williams explained that these figures reflect the 1 October cut-off date, with advisers that have yet to pass the FASEA exam given until 1 October to get off the Financial Adviser Register.

“Losses were very high, and we believe the vast majority are due to the non-passing of the financial adviser exam. We suspect that we will see more losses in the coming weeks for the same reason,” Mr Williams said.

WT Financial Group was down a net of 23 advisers, losing 26 and appointing three while Synchron suffered a net decline of 24. Diverger lost 14, while AMP reported a decline of six advisers.

Looking at the licensee market since 2019, Mr Williams flagged an interesting trend — the rise of small firms.

“The charts highlight that licensees with 100 or more advisers once had a total of 10,853 advisers (3,337 + 7,516) which represented 63.1 per cent of the adviser market.

“As of today, those numbers have shrunk to 4,858 advisers or 50 per cent of the adviser market. Meanwhile, the small self-licensed sector of licensees, with between one and four advisers, has grown from being 7.6 per cent of the market to 16.2 per cent”.