AMP has sought the advice of $16 billion FUA American wealth firm United Capital in embarking on the goals-based financial advice strategy it says is crucial to its growth plans.
Yesterday, InvestorDaily sister title ifa exclusively revealed that AMP has been engaged in a non-commercial knowledge-sharing arrangement with the California-based registered investment adviser (RIA) firm, which has informed its strategic shift away from product-centric financial advice.
“AMP began developing its goals-based approach three years ago. We undertook global research, looking for other like-minded companies adopting a similar goals-based approach,” an AMP spokesperson said.
“As part of this process we found United Capital, a US-based financial advice and wealth management company.
“We have built a strong relationship with United Capital, sharing information and expertise. This continues to be beneficial for AMP and United Capital.”
United Capital has been a vocal advocate of the financial life management (FinLife) movement that has taken root in American wealth management in recent years as a reaction to the perceived investment-centricity of the Wall Street brokerage firms.
In an interview with ifa magazine in New York in 2015, United Capital founder and chief executive Joe Duran said his firm rejects some of the traditional assumptions of the financial services industry.
“For the overwhelming majority of the history of our industry, advisers have believed that their job is to build their clients’ net worth,” Mr Duran said.
“[For financial life managers], our goal is not to maximise net worth but to maximise people’s lives.
“The false assumption of maximising net worth leads to fat wallets and unfulfilled lives. And that’s not something to be necessarily proud of.”
His comments bear similarity to those of AMP chief executive Craig Meller, who told an investor briefing last month that the institution is pivoting from being a financial product manufacturer to a customer-oriented business.
Mr Meller said this strategic pivot is core to its growth plans in wealth management, which a Citibank analyst described as a "sensible" approach.
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