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AMP Capital, wealth cop billions in outflows

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AMP’s wealth management business saw net outflows of $1.9 billion while its investment manager, AMP Capital, saw $1.1 billion in net outflows.

The wealth segment saw its assets under management increase to $133.2 billion in Q3 2019, a slight incline from $132.6 billion the year before. 

However its net cash outflows, increasing by 35 per cent from the prior corresponding period, were driven by $9 billion flowing out, as opposed to $7.1 billion coming in. 

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The outflows from wealth was dominated by $6.8 billion from retail funds on AMP platforms, while $1.6 billion flowed out from corporate superannuation. 

AMP cited $600 million in regular pension payments to its clients and $200 million losses from the introduction of the Protecting Your Super legislation. 

However chief executive Francesco de Ferrari said each of the company’s businesses had performed “broadly as expected” during the period.

“Australian wealth management is taking significant steps to reinvent its business model, building a business around client needs,” Mr de Ferrari said.

“We have achieved stronger inflows during Q3, reflecting our improved fee competitiveness, but also higher outflows as the new Protecting Your Super legislation was implemented in Australia.”

AMP has indicated it will be merging its wealth and banking businesses into one unit, following the resignation of the company’s bank chief Sally Bruce. 

Although there were no material outflows from the loss of corporate super mandates during the quarter, AMP has predicted outflows for the segment of around $1.4 billion in the next year. 

The North superannuation products saw net cash inflows up 25 per cent from the prior quarter to $1.1 billion.

External financial advisers were said to generate 31 per cent more in inflows than the prior quarter ($300 million). The default option, MyNorth, had fee reductions which also led to higher internal flows. 

AMP Capital net outflows total $1.1 billion

Meanwhile, the Capital business had net cash outflows of $1.1 billion.

AMP Capital’s assets under management increased to $202.2 billion, up by 5 per cent from $192.4 billion in Q3 2018. 

Further, AMP Capital’s external net cash inflows were $0.8 billion, reflecting strong momentum in infrastructure debt, where $0.6 billion was invested in international assets and real estate, but were offset in part by public markets redemption and China Life AMP Asset Management outflows.

“AMP Capital continues to experience strong demand for its real assets investment capabilities, with especially strong infrastructure debt flows and commitments of [$US6.2] billion received for its fourth infrastructure debt strategy,” Mr de Ferrari said.

The Capital business saw net cash outflows of $1.9 billion.

Bank deposits increased by $600 million in the third quarter to $14.5 billion, with AMP reporting strong growth in retail and platform deposits. 

The company’s total loan book grew by $100 million to $20.3 billion in the quarter. 

The New Zealand wealth management business saw its AUM down at $11.8 billion for the quarter, while it experienced net cash outflows of $79 million, in contrast to net inflows of $92 million the year before.

 

AMP Capital, wealth cop billions in outflows
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Sarah Simpkins

Sarah Simpkins

Sarah Simpkins is a journalist at Momentum Media, reporting primarily on banking, financial services and wealth. 

Prior to joining the team in 2018, Sarah worked in trade media and produced stories for a current affairs program on community radio. 

You can contact her on [email protected].

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