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50% profit loss for AMP Wealth Management
AMP Wealth Management has reported operating earnings of just over $100 million in the first half of 2019, despite drastic plans for a reinvention aimed at “helping clients realise their ambitions”.
50% profit loss for AMP Wealth Management
AMP Wealth Management has reported operating earnings of just over $100 million in the first half of 2019, despite drastic plans for a reinvention aimed at “helping clients realise their ambitions”.
The company had reported operating earnings for AMP Wealth Management as being just $103 million in the first half of 2019, which was a 49.5 per cent decrease on the same period in 2018.
Operating earnings were reportedly impacted by margin compression from MySuper fee reductions, advisers moving clients to more contemporary solutions, as well as through the removal of earnings transfer from AMP Life.
Alongside the announcement of its 2019 interim results, AMP has said it will be implementing a new three-year strategy in a move towards simplified and automated client advice.
The shift will see a change to the wealth giant’s focus, with new emphasis on direct-to-client channels and digital solutions.
AMP Bank solutions will also further be integrated with the wealth management suite, in a bid to target double-digit earnings growth.
According to the figures given, the new strategy will not be cheap, with AMP anticipating the changes to cost upwards of a billion dollars.
Despite this, the cost-reduction program is expected to achieve $300 million in annual run-rate savings by the 2022 financial year.
To fund the program, AMP will be utilising proceeds from its fully underwritten $650-million capital raise, as well as the funds from AMP Life’s completed sale.
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