Can Hartley do at Insignia what was denied him at AMP?

ANALYSIS

The challenge for Scott Hartley as the newly-announced chief executive of Insignia Financial Limited is to return the company’s financial advice business to profitability allied to settling its platform business.

Ironically, that was also his major challenge at AMP Limited but he has greater prospect of reasonably quickly succeeding at Insignia because of the partnership ownership model it has been seeking to sell to self-employed licensees.

If the market is any indicator, then Insignia shareholders seem to believe Hartley may be up to the job, with the company’s share price picking up to close at $2.24 after having decline from $2.49 closing out 2023.

Hartley’s departure from AMP Limited was announced in May last year as part of a restructure which saw the wealth management division dissolved as the company moved advice to a new operating model.

He had been a part of the AMP hierarchy since January 2021 and while he oversaw a more focused approach to driving the wealth management division back into overall profitability it was clear that the company’s major shareholders had no appetite for an expansionary approach.

Hartley’s arrival at AMP preceded that of the chief executive, Alexis George, and there were those who suggested that, with his no-nonsense approach and background at MLC Limited and Sunsuper, he was a stand-out candidate to assume the top job. However, it was not to be, and his exit last year also put paid to market rumours that AMP might be in the running to acquire Westpac’s BT Panorama platform.

Hartley is moving into familiar territory at Insignia Financial and will bring with him an understanding of the MLC Wealth business the acquisition of which was completed in May 2021.

He will also be familiar with the dynamics which underpin Insignia’s partnership ownership model for its self-employed licensees which his predecessor, Renato Mota, claimed last year would “accelerate the return to profitability of our advice business, while ensuring our Advice Services model is positioned for sustainable growth”.

Hartley will also be conscious that the current financial year marks the final year of the three-year separation and integration program and that the company’s shareholders will be looking for genuine returns.