AMP (ASX: AMP) used to be the most recognised and trusted name in managing wealth in Australia.
It is still well known, but for all of the wrong reasons as customers vote with their feet and withdraw their investments from AMP and go elsewhere in the wake of the Hayne Royal Commission.
In the past year, AMP has recorded outflows of $5.5 billion from its Australian wealth management arm as customers took their savings elsewhere in the wake of the royal commission.
That compares to just $200 million in the prior corresponding period.
In superannuation, cash inflows are also slowing, down to $4.69 billion, a $1.3 billion reduction on the same time a year earlier.
AMP being rebuilt from the ground up
As chairman David Murray and chief executive officer Francesco de Ferrari said at the annual shareholder meeting, this is a company that is being rebuilt from the ground up and the highest priority is to regain the trust of the Australian public.
One thing that is flowing in AMP’s favour while it rebuilds is that investment markets have turned up significantly since the end of 2018.
Indeed, despite slower cash inflows and much larger cash outflows, assets under management (AUM) have actually increased, rising by 4% in Australia, 7% in New Zealand and 4% for AMP Capital.
Shareholders angry about asset sales and incompetence
That didn’t stop shareholders at the meeting from venting their fury at the cratering AMP share price and, particularly, for the decision to sell its life business to Resolution Life for a price that many said was below its true value.
AMP also announced that chief financial officer Gordon Lefevre would leave after five years in the job, being replaced by John Patrick “JP” Moorhead, who is currently chief financial officer of AMP Capital.
That departure follows a raft of farewells caused by the Hayne Royal Commission, including former chief executive Craig Meller and former chairman Catherine Brenner.
Mr Murray apologised for the losses shareholders, employees and advisers had suffered over the past year after the royal commission revealed that AMP had charged fees to customers despite knowing they were not receiving a service, including some customers who had died.
AMP had also repeatedly lied to regulators about compensating customers.
Mr Murray admitted the company had “faltered from its purpose’’ and was “was too slow to identify customer issues and take appropriate action.’’
He said it was now investing in monitoring and systems and was ensuring management was responsible for the consequences of decisions.
Mr de Ferrari said AMP was focused on transforming its business so that it could compete more effectively.
It had lowered fees on its MyNorth products after fee cuts for its MySuper product in 2018.
“We’ll continue to modernise our products to put AMP in a position where we can win in the market,” said Mr de Ferrari.