AMP on cusp of key digital advice commitment
AMP Limited is on the cusp of making key decisions ahead of embarking on its digital advice strategy.
AMP head of advice, Matt Lawler said the company was in the market to make a decision notwithstanding the economic challenges and that it certainly would not be embarking on a loss-making venture.
Speaking on a panel at Financial Newswire’s Platforms, Wraps and Advice Technology Conference in the Hunter Valley, Lawler acknowledged the advice challenges the company had faced in recent years but said that he believed the majority of these issues were behind it.
He said that the company had surveyed its advisers last year and that “our adviser sentiment is as high as it’s ever been creating clear air for the company to get on with implementing it strategy.
“We are well on the way to getting our [advice] business to break-even,” Lawler said and noting that it would be achieving further improvements after halving its losses in advice last year.
In doing so, he said that AMP was looking to improve profitability by having an advice model that was “broader than just the face-to-face advice model”.
“And that is going to be a really important part of the eco-system in the future,” Lawler said. “But when we think about digital advice we don’t think it’s binary and I remember years and years ago there was always this debate that would get advisers really annoyed because it was like a battle, it was like you think this is better than face-to-face I’m going to rubbish you’.”
“But the reality is that it [digital advice] is not binary – clients will move between different solutions and if you can capture clients early in a digital solution it actually sets you up to nurture them to become a very good face-to-face client and vice versa,” Lawler said. “Some people may get some episodic advice and then go back to digital in terms of how they manage it.”
“The experience with delivering advice is that that’s not the only way that a customer will do it – they will dip in and out – and we see digital as being part of the client journey but something which will help us deliver advice and make it more affordable.”
Lawler said there were a couple of things AMP needed to get right “before we stumble in” noting that the company was being very cautious about for good reasons not the least of which being because it represented a “greenfield area”.
“And if we get something wrong, how is ASIC going to treat us,” he asked before suggesting that the regulator needed to work with companies to help them get their entry into digital advice right.
AMP have tried numerous times in the past to implement digital styled advice and failed miserably. They are incompetent in this area and will prove so again in the future. They however probably have more incentive now that no advisers will join them and the one’s that are there are looking to jump ship prior to AMP management knifing them in the back.
Agreed. Someone who has been with them for over 20 years, they have failed miserably in every technology they have introduced.
Here is another perspective to challenge the views expressed below.
It’s a pivotal time for the advice industry. I believe that in life, and business, what is most important is what you do next.
Digital advice is not binary. Clients move in and out of different forms of advice over time. Digital advice is as much an offer for an advisory practice as it is direct to consumer offering from superannuation funds. Indeed, practices share the same cost to serve issues as large institutions and superannuation funds. Digital advice provides a service for all players to “nurture” clients along the advice spectrum. We are on this journey with the rest of the financial services sector and fintechs. AMP is ‘walking the talk’ in this space. We are competent in this area and will prove so again.