In the midst of a tumultuous few years, AMP has dedicated significant efforts to reshape its institutional culture, aiming to overhaul its reputation – particularly among advisers in the aftermath of the royal commission.
The appointments of Alexis George and Matt Lawler have been viewed as steps in the right direction for a company that has been hit by numerous class actions and a prevailing sense of community distrust.
Its share price has been devastated over the years, falling most recently to just 90 cents following market hesitancy towards its foray into small business digital banking.
But, as of Thursday, management at AMP is more than eager to usher in a new chapter.
Namely, this week, AMP sealed a $100 million settlement related to a class action brought by advisers in relation to the wealth giant’s controversial decision to change its Buyer of Last Resort (BOLR) scheme.
This capped off its appeal against the July Federal Court decision, marking a crucial turning point that AMP hopes will help it bury the hatchet on a legacy matter that has strained its relationship with advisers.
In a statement on Thursday, AMP said the agreement that settled the class action brought on behalf of advice practices authorised by AMP Financial Planning Pty Limited (AMPFP), is an “important step forward” for its advice business and AMP more broadly.
“It allows us to put this legacy matter behind us, which has impacted relationships with our valued advisers,” Ms George, AMP chief executive, said.
Speaking to InvestorDaily’s sister brand ifa moments after the announcement, Mr Lawler, managing director of advice at AMP, exuded 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.”
He asserted that AMP’s recent actions are already garnering positive feedback from the advice industry.
“The last two and a half years, we’ve worked really hard to make the necessary changes on a couple of fronts – one, to help advisers deliver a better client experience and two, to help them run an efficient practice that is profitable,” Mr Lawler said.
This has been achieved through a comprehensive strategy that has encompassed technology upgrades, process enhancements, policy improvements, and the launch of new services aimed at empowering advisers to engage more commercially with clients and broaden conversation topics.
“The sentiment we’re getting from advisers has improved. During my tenure it’s improved from what I would call probably a little bit toxic when I started, and very pleasingly, we’ve got a good working relationship with advisers,” Mr Lawler said.
But he also acknowledged that AMP still has work ahead to address and refine its imperfections as it strives to move beyond its past.
“We’ve still got improvements to make but I think the advice network is now seeing that we’re heading in the right direction,” Mr Lawler said.
“And that’s why it was really important for us to resolve BOLR because it was the one thing from the past, there were quite a few of them we had to deal with whether it was legal proceedings, whether it was an enforceable undertaking through ASIC, BOLR was the last of the historical issues we had to deal with and it was the biggest one.”
Looking forward, the wealth manager's primary emphasis will be on “setting itself up for the future”.
“It’s about continuous improvement and how we constantly evolve what we do for our advisers so that they feel this is a great place to be, and the place that they want to be,” Mr Lawler said.
Despite the ongoing trend of advisers leaving large licensees, Mr Lawler is upbeat, assuring that licensees like AMP aren’t dimming their lights anytime soon.
“The role of large licensees, we think, is still a really important part of the licensing framework, and we think it’s going to continue to be that way,” he said.
AMP has since 2002 had an active business unit aimed at helping self-licensed practices, called Jigsaw. And while the wealth manager has full intention to continue to invest in its licensee business, it also intends to support those choosing to self-licence.
However, circling back to the theme of redemption, although AMP has transitioned to a more open architecture by shedding the vertical integration model of the past, the extent and pace at which advisers are willing to embrace this change are yet to be seen. AMP is widely held responsible for the toll its BOLR changes had on advisers’ mental health, and, as such, forgiveness for its missteps seems a long way off for many.
Maja's career in journalism spans well over a decade across finance, business and politics. Now an experienced editor and reporter across all elements of the financial services sector, prior to joining Momentum Media, Maja reported for several established news outlets in Southeast Europe, scrutinising key processes in post-conflict societies.