AMP’s platforms suffer significant cashflow dip

AMP has reported net cashflows of $426 million for its platforms business during the third quarter, a fall of 43 per cent on the $748 million of net cashflows recorded in Q3 2022.

In a quarterly update to the ASX on Wednesday, AMP said this decline was “predominantly driven by the reduction in non-superannuation investment in response to the current economic conditions”.

Platforms assets under management (AUM) held steady between Q2 and Q3 2023 at $68.3 billion, with Q3’s net cashflows offsetting pension payments of $499 million, while market movements only had a “minor positive impact”.

According to AMP, North inflows from independent financial advisers (IFAs) increased from $483 million in Q3 2022 to $565 million in Q3 2023.

“In platforms, we continue to focus on driving flows from IFAs, with a 17 per cent increase on the prior corresponding period,” commented AMP chief executive officer Alexis George.

“AUM remained steady and net cashflows were lower as we continued to see a reduction in discretionary investment, as clients respond to the current economic environment.”

AMP indicated that its New Zealand Wealth Management business had been impacted by a strategic decision to divest legacy products in order to simplify and de-risk the business.

Negative net cashflows of $36 million were recorded for New Zealand Wealth Management in Q3 2023 versus positive net cashflows of $23 million in Q3 2022. AUM slipped from $10.8 billion to $10.4 billion between the second and third quarters of this year.

Ms George also drew attention to the firm’s retirement solution MyNorth Lifetime, which was launched last year and recently won an award for pension fund design and reform at the WorldPension Summit in the Netherlands.

“This supports our intention to be a leader in this space, ensuring more Australians can enjoy a better life in retirement,” Ms George said on the award win.

In AMP’s Master Trust business, negative net cashflows of $4.9 billion were declared for the quarter, compared to negative net cashflows of $722 million in the same period a year earlier. AUM fell from $55.4 billion in Q3 2022 to $50.3 billion in Q3 2023.

“As we confirmed at [our] half-year results, the transfer of a Master Trust mandate loss in August was reflected in negative net cashflows and a decline in AUM,” Ms George noted.

Elsewhere, AMP Bank’s total loan book grew by $0.5 billion to $25.0 billion in Q3 2023.

Residential loan growth through to the end of August was 1.64x system. But AMP warned that growth is expected to be “subdued” for the rest of 2023. Meanwhile, total deposits increased by $0.8 billion to $22.1 billion, with a majority of inflows coming from customer deposits.

“We continue to actively manage the bank portfolio in what remains a highly competitive environment, particularly as the Term Funding Facility (TFF) refinancing continues across the market,” Ms George said.

“We expect to see subdued growth for the remainder of the year as we continue to manage net interest margin (NIM), with full year NIM now expected to be below previous guidance of 1.30–1.35 per cent.”

In August, AMP reported an underlying net profit after tax (NPAT) of $112 million for the first half of 2023. The advice segment saw NPAT losses of $25 million, though this was a 16.7 per cent improvement on the $30 million loss seen in 1H22.

Jon Bragg

Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.