AMP changes view of advisers from distributors to service providers
AMP financial advisers may have once been all about distribution but not any more, according to the company’s head of advice, Matt Lawler.
In fact, Lawler says that is one of the key things he is changing about the company and that advice cannot and will not be a loss-leader for AMP because businesses that were primarily focused on distribution ultimately became loss-leaders.
Speaking at Financial Newswire’s Platforms, Wraps and Advice Technology Conference, Lawler said: “One of the things I’m changing about the advice business is that it was previously just a product distribution arm. It was set up to sell product”.
“Now, we’re moving it to a business that is commercial where our revenue pays us for our services and our expenses are about delivering services to deliver good quality advice – its not about product,” he said.
Lawler said that this extended to AMP’s approach to digital advice because the simple retention of clients was not, of itself, a sound business case
“Its got to be a commercial operation because retention of clients, clients who may or may not put more money in, is not a strong business case. What fees are we going to get paid by the clients? What are the super funds going to pay to the business to deliver the service?” he said.
“So there is a big market there for advisers who have a whole lot of previously advised clients who have not gone on to an ongoing service arrangement that they still want to service and they still want to nurture but they don’t want to do it in the expensive environment that exists today. And we would challenge advisers to actually do that.”
Discussing the AMP approach to digital advice, Lawler said: “This will not be a loss leader. Because that is what happened to advice businesses which were really distribution businesses – they were loss-leaders that made acquisitions to sell product”.
“We must change that culture to [one of] businesses that can stand on their own two feet according to what clients are prepared to pay.”
“And if they’re prepared to pay $300 then we need to get a million of them in to make it fly. If we can’t get a million of them in, it doesn’t fly.”
“So, the economics on both sides in terms of the cost of the technology and what revenue the businesses can get.
“When I talk to advisers I think the sentiment has changed a lot and that as much as super funds are looking for a solution in this space, I think advisers are looking for a solution in this space and I think that is a good thing because if you can do that in the right way you’re not going to be butting heads and having one side trying to tear down the other.”
Wow! Moving with the times AMP! Advisers are no longer used car salesmen product floggers but actually provide professional advice and guidance. Amazing progress….
With due respect Jim, I know a number of Charter advisors. And they have always been very professional. They did the Masters a decade ago and run successful corporatized firm.
but they work for AMP still don’t they.
No they wouldn’t, they’d work for their own business that pays licensee fees to AMP.
No, they work for themselves. And use Charter Licensee services.
Makes it even worse. Selecting a licensee on there own hip pocket over their clients, there peers and there industry. They had free choice and selected a licensee rotten to the core. A licensee that made advice unaffordable, lied to ASIC 22 times, practices that resulted in bad regulation that lead to adviser suicides, ruined the lives of honest advisers. There the worst of the worst in my book and here in 2023 AMP some 13 years after concepts of fiduciary were implemented decide to change there language.
*Their.
If you are going to go on a rant about how glorious you are – at least you could spell words correctly?
They may be self employed but like all financial advisers they are ultimately controlled by their licensee. They are encouraged and “nudged” to use a lot of their licensee’s inhouse product. If they do, they are given lots of support and light touch compliance. If they don’t, compliance will be weaponised against them. It’s much the same with all licensees that have inhouse product, and is one of the reasons vertical integration should be banned. Hayne & Levy just don’t get it.
My apologies, @One foot – I did not mean to cast aspersions at the advisers themselves…I was having a dig at the way in which AMP views and treats advisers. I also know former AMP advisers…one of whom almost had a total nervous breakdown from the poor treatment received at the hands of that organisation.
Nice to see AMP moving along towards putting the client first (rather than the product) – my point is, they’re about the last advice business in the country to do so!
Jim
Realistically AMP is only interested in it’s profitability and doesn’t care about its advisers or the financial planning industry as a whole. It’s time for this unethical and bloated organisation to be sold off so that financial planning can move forward without the weight that is AMP around it’s neck. Actions speak much louder than words and the actions of AMP over the years show what is important to them.
100% agreed, please AMP sell off the rest of Assets, let those poor Advisors out of your cruel clasp and die quickly.
RIP AMP
Surely this comment is from 15 years ago and is just being reported. There is no way this can be a new thought bubble from AMP or are they really that far behind
Hang on we’ll just ask some dead people who were AMP clients ? Yep AMP are that far behind everything Advice.
Interesting comments from Mr Lawler. Perhaps he can explain why distribution and licensee still meet up to discuss who is supporting the house in terms of product sales?
AMP needs to do the decent thing and leave advice to professionals!
Is this where the saying about a Pig and lipstick comes from ? Yes change the language, but their Advisers have been brainwashed in a period of time where they had a “Register”. Their job is to suck as much blood out of the leach, for a 5-10 year period (all expenses paid for and 0.5% interest) before handing it all back to AMP? Do they still have a Register ? I would really like to see all AMP and ex-AMP advisers go to a North Korean Style re-education camp to beat the AMP out of them. Something similar where people escape from a cult and have to go through a natural adjustment process.
Bemused the advisors you talk of, above. Are long gone. Probably not to North Korea, I suspect to the beach and a happy life.