AMP plays key card in future strategy

Mike Taylor

Managing Editor/Publisher, Financial Newswire

19 October 2022

ANALYSIS

If anyone doubted that in the North platform represents the vehicle via which AMP Limited intends driving into the future, then that doubt should have been removed by the company’s launch of its foray into the retirement incomes market via MyNorth Lifetime.

Having sold off its insurance business and most of what was AMP Capital, AMP has been left with three core components – AMP Bank, the North platform and its financial planning business.

By most analyses AMP Bank is a useful but comparatively sub-scale business, while the AMP financial planning business is still being modified but is arguably at least 18 months short of break-even, and an optimistic three to four years before it is back in the black.

That leaves the North platform which AMP picked up via is near-decade-old acquisition of AXA and which has been a consistent contributor to the company’s bottom line when other elements of the business have fallen short.

When you put the North platform together with AMP’s belief that the retirement incomes market is under-serviced and open to growth via innovation then you get the rationale behind MyNorth Lifetime.

Indeed, the company flagged in its half-year results its intention to launch an “innovative retirement solution on the North platform” as its top-most priority for the second half of calendar 2022.

However, as much as AMP built financial adviser relationships into its announcement of the MyNorth Lifetime product, readers of its half-year results investor presentation would also have noticed the company’s intention to “establish direct-to-consumer solutions in selected areas” together with an intention to “develop leading position in retirement”.

A feature of MyNorth Lifetime is that consumers can access the product suite direct or via their advisers but with the language of the launch referencing customers ahead of advisers.

Interestingly, the new product coincides with AMP’s efforts to attract a greater number of independent financial advisers (IFAs) to use of the North platform.

While there are some significant innovative elements to the MyNorth Lifetime product it is similar to other, earlier offerings from other product manufacturers.

Many will see it as being, in essence, a market-linked annuity but AMP was keen to stress the difference that while “traditional lifetime annuities pay a fixed income for life, which requires investment in relatively conservative investments and the need to reserve substantial capital according to regulations, MyNorth Lifetime is different.

It said this was because “it pays a variable (market-linked) income for life, and customers and advisers can choose from any investments on the North platform. This enables higher rates of income, and the flexibility to make changes over time to adjust for changing customer and economic circumstances”.

An important differentiator of the offering is an annual bonus which is being effectively underwritten by major life insurer, TAL, and calculated as a per centage of the account balance.