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Positive investment markets drive AUM growth at AMP

3 minute read

The wealth management company reported a substantial increase in its superannuation and investments AUM in the first quarter.

In an announcement on the ASX on Thursday, AMP reported that superannuation and investments assets under management (AUM) increased to $54.1 billion from $51.9 billion in Q4 23. This, according to AMP, reflected positive investment markets, partially offset by net cash outflows of $371 million and pension payments of $89 million.

Net cash outflows of $371 million for Q1 24 reduced from net cash outflows of $610 million in Q1 23 and pension payments increased to $89 million (Q1 23: $76 million), which were also reflective of the recent increases to minimum drawdown limits.

AMP revealed that since the last quarter of 2023, its super AUM has increased its exposure to Australian and international equities slightly. Namely, 21 per cent of the $54.1 billion is invested in cash and fixed interest, compared to 23 per cent in the last quarter of 2023, while exposure to Australian equities edged up from 29 per cent to 30 per cent, and to international equities from 39 per cent to 41 per cent.

AMP’s net cashflow in its platforms business increased 32 per cent from $152 million in Q1 2023 to $201 million in Q1 2024.

The wealth manager added that pension payments increased to $500 million for the quarter from $392 million in the prior corresponding period, which it said reflected the increase to minimum drawdown limits from July 2023.

The positive net cashflows, along with stronger investment markets, contributed to platforms AUM increasing by $3.2 billion to $74.3 billion.

North inflows from independent financial advisers were up 22 per cent on Q1 23 to $544 million and managed portfolios on North reached $14.9 billion in AUM, up from $13.3 billion in Q4 23.

“In the first quarter we saw an increase in platforms net cashflows, improvements in superannuation and investments net cash outflows, and AUM up across both of these businesses,” said AMP chief executive Alexis George.

She added that the growth of inflows from independent financial advisers reflected “the continued strategic focus on platform functionality and investment choice that has helped to attract this market”.

“Managed portfolios on our flagship platform North reached $14.9 billion in AUM, continuing the strong growth trajectory since its launch in 2018,” George said.

AMP Bank’s total loan book was $23.5 billion in Q1 24, down from $24.4 billion in Q4 23, which it said is “in line with the stated strategy to prudently manage loan growth given current margin pressures”.

Total deposits were up slightly from $21.3 billion in Q4 23 to $21.4 billion during the period.

“We are navigating the headwinds faced by AMP Bank by carefully managing our loan and deposit books, to help address margin pressures,” George said.

“We are making good progress on the development of our digital small business and consumer bank offer, launching in Q1 25, to lessen funding risks over the medium term by broadening the customer base and introducing a compelling transaction account offer that will help diversify and build deposits.

“Our wealth management businesses, platforms, superannuation and investments, and New Zealand, benefited from the positive investment markets, while in Australia, pension payments increased as we continue to see the impact of the lifting of minimum drawdown limits that came into effect in July 2023.”

In a speech at AMP’s annual general meeting last week, the CEO spruiked the bank’s ability to reposition and simplify its portfolio during 2023, including within advice.

“Our advice business continues to reduce costs and improve efficiency, as we make good progress to establish advice as a sustainable, standalone, and professional business,” George said.

“Adviser sentiment has further improved which is certainly encouraging.”

She added: “We remain focused on achieving break-even in advice, and we are continuing to look at alternate structures with our adviser network.”