AMP says it’s now more popular among advisers amid advice business’ continued losses

AMP’s advice segment saw an underlying net profit after tax (NPAT) loss of $47 million, an improvement of 30.9 per cent on 2022 – a result the firm views as “continued progress” in establishing advice as a “sustainable, standalone business”.

In its full-year 2023 financial update filed to the ASX on Wednesday, AMP said its focus throughout the year continued to be on reducing advice losses and exploring alternative structures.

Advice revenue dropped 10.7 per cent to $50 million, but, according to the firm, adviser numbers stabilised, despite volatility in the wider market.

AMP said it is “starting to attract new practices to the network” and noted that the “quality” of its adviser network “remained strong” with average revenue per advice practice above the industry average of $1.75 million.

The firm also noted that sentiment towards it continued to improve with adviser satisfaction scores at 81 per cent, up from 68 per cent in 2022.

AMP also acknowledged its focus on “revitalising” its Jigsaw offering – which has been around since 2002 – to support self-licensed advisers as the industry moves towards self-licensing and micro-licences.

Speaking to ifa in November, Matt Lawler, AMP group executive, advice, said that while the wealth manager has full intention to continue to invest in its licensee business, it also intends to support those choosing to self-license.

Last year, AMP settled the Buyer of Last Resort (BOLR) class action.

Following the settlement, Mr Lawler expressed a sense of relief and optimism for redemption in the future.

“Over the last two years, we’ve worked really hard to improve the services to advisers and work with advisers on the services they value, and we’re getting great feedback from advisers more broadly,” Mr Lawler said.

“But we always had this looming issue around BOLR, which was a historical issue, it was before my time back in 2019, but we had to deal with it. We’re really pleased that the outcome we got yesterday was that there is an agreement to move forward.”

With this announcement, AMP made its intention clear: to improve its relationship with advisers.

‘2023 a year of progress’

Commenting on AMP’s overall 2023 results, AMP chief executive Alexis George said, “2023 was a year of progress for AMP”.

“We have repositioned the portfolio with the completion of the AMP Capital sales, built momentum in our cost-out program, and resolved a number of significant legacy legal matters,” Ms George said.

“In addition, we have continued to reduce net debt, implemented further business simplification initiatives, invested in sustainable growth and returned surplus capital to shareholders.”

Namely, AMP recorded NPAT growth of 6.5 per cent to $196 million in 2023. AMP Bank’s underlying NPAT dropped from $103 million to $93 million, while platforms saw growth of $25 million to $90 million, reflecting positive North Guarantee movement from favourable market conditions.

Despite this, however, the group’s underlying NPAT loss expanded from $1 million in 2022 to $27 million last year, reflecting lower strategic partnership earnings.

Ms George said AMP now has a “clear strategy” focused on three areas.

“The first is to drive the profitability of our businesses, AMP Bank, master trust, advice, platforms and New Zealand. The simplification program and investment we’ve undertaken across the portfolio is delivering positive outcomes for our customers and provides a foundation for sustainable growth,” she said.

The second is “efficient cost and capital management”, while the third includes building its capabilities across the wealth value chain and large customer base to create new sources of revenue and lasting points of differentiation with customers.