Neither AMP nor Insignia are profitable advice businesses

Mike Taylor

Managing Editor and Publisher

27 April 2023

Australia’s two largest financial planning licensees – Insignia Financial and AMP Limited – are not providing financial advice profitably.

The two companies have confirmed in updates provided to the Australian Securities Exchange that they are yet to achieve “break-even” in their financial planning businesses despite significant restructuring efforts over the past two years.

Insignia reinforced this fact in its third quarter update provided to the ASX yesterday in which it stated that: “Insignia Financial remains committed to achieving break-even in the Advice Services channel and to delivering overall profitability in Advice”.

For AMP, its chief executive, Alexis George used her address to the company’s annual general meeting in late March to cite as a major achievement that “in our Advice business we successfully drove down costs for the second year in a row and more than halved the losses in the business”.

“Continuing to drive our Advice business towards break-even is one of the businesses’ highest priorities and good progress to be made,” she said.

The common bottom line for both Insignia and AMP is that they have driven down the number of advisers directly employed within their organisations while driving up those who are self-employed and self-licensed.

This is against the background of Insignia stating that it was maintaining active advice relationships with 1,483 financial advisers of which just 242 are directly employed by the company and the remainder are self-employed or self-licensed.

This compares to AMP which in February was reporting that it had just 112 employed advisers and 924 aligned advisers.

Both Insignia and AMP have indicated heavy reliance on the performance of their platforms, with AMP positioning its North platform to attract more business from independent financial advisers (IFAs) while Insignia is in the process of refining its platform offering around Evolve.