AMP Limited’s positive first half 2012 performance will enable the company to expand the reach of its advisers.
AMP reported a net profit of $383 million for the half year to 30 June 2012, up 11 per cent from first half 2011.
Its underlying profit, determined by the dividend payment and reflects the business performance, was $491 million, up 7 per cent, compared to $459 million for first half 2011.
“We’re looking to improve both the breadth and quality of both our adviser footprint and contemporary set of products, and the capacity that these bring for stronger growth going into the future,” AMP chief executive Craig Dunn said.
He pointed out AMP had prepared for potential adviser attrition in the Axa network but had experienced much better planner retention than first anticipated.
The business added a further 128 advisers over the last six months in Australia and New Zealand, growing to 4259 at 30 June 2012.
Scale and an integrated business model will deliver and sustain a real competitive advantage for AMP in the challenging environment of the Future of Financial Advice (FOFA) and Stronger Super, Dunn said.
“A critical part of our strategy has been to position AMP for the future, to take advantage of a rapidly changing environment, including regulation,” he said.
“One of the consequences of the regulatory change is that large and more scalable businesses, and also businesses that have an integrated advice or business model that go across the value chain, are more competitively placed following the implementation of FOFA.
“Again, the evidence is already bearing that out in the consolidation that you’re seeing in the sector where some of the smaller participants are choosing to partner with larger participants like AMP.”
The business moved away from in-built product commissions in new sales of superannuation, investment and retirement products two years ago.
In addition, Dunn said AMP did not make retention deals for advisers.
Its strategy for achieving adviser growth was through small acquisitions, such as Futuro Financial Services and the Horizons Academy, he said.
“We’re very pleased with the overall size of the adviser force and the way those numbers grew over the past six months.”
While the Axa merger was supporting AMP’s drive to become a more competitive business, he said it was “more than just an integration story”, as it pursues new growth areas such as the self-managed superannuation market and the retail investment market in Japan, through AMP Capital.
