Will advice divestment open AMP North to more advisers?

Last week, it was announced that AMP would sell off its licensee and self-licensed business Jigsaw to Entireti for $10.2 million. Questions were then asked whether the exit of those advisers would affect flows on the North platform.

The firm has been vocal about wanting to increase the proportion of flows it receives from independent financial advisers, and platform specialist and founder of SuitabilityHub Recep Peker said the divestment may help in this regard.

In its first-half financial results for the six months to 30 June, it said IFA inflows into North represented 35 per cent of total inflows at $1.4 billion.

Speaking to ifa, Peker said: “You wouldn’t expect to see advisers leaving the platform because of the divestment, it could actually be a good change in terms of attracting IFAs to the platform.

“If any IFAs had any concerns about North being part of a large dealer group, then those concerns have been alleviated. There will be less friction and resistance to choosing North over other platforms now.

“The IFAs we speak to are big fans of AMP North but what gets in the way is the advice relationship, so this removes that friction.”

He said North ranked highly as a platform in four areas: its digital-first experience, its leadership in the retirement space, its managed accounts, and its competitive pricing.

“North has a very modern platform with a digital-first, online experience, more so than the other platforms. Key processes can be completed on North online with instant execution. People who use North really like this fact as it drives efficiency for the advice firm and is a time saving for them,” Peker said.

“It is also an industry-leading platform for retirees and provides tools, support resources, and modelling that enable advisers to have better conversation with their clients to demonstrate the value of the advice relationship over the long-term.

“They have some managed account functionalities that none of the other platforms do such as the ability to hold fractional shares in SMAs, which means they make SMAs accessible for lower-balance clients. They also have a ‘buy, badge, build’ model for SMAs, meaning they can cater to the varying levels of involvement desired by different advice firms ranging from off-the-shelf to bespoke models.

“Finally, it is competitively priced, it’s viewed as a cost-effective solution.”

In its first-half results, AMP said net profits after tax (NPAT) on its platform division was $54 million, up 22.7 per cent from the first half of 2023 NPAT of $44 million, thanks to stronger market conditions and cost discipline. This cost discipline helped offset ongoing investments made in North technology and distribution capabilities.

Closing assets under management grew 5.1 per cent to $74.7 billion, driven by positive net cash flow of $1.2 billion and market movement. The net cash flow was up 56.5 per cent, partly driven by continued managed portfolio growth, which reached $15.9 billion, and inflows from independent financial advisers.