Invest
Customers come first but dividends will soften: AMP
AMP Limited will carve out $290 million to compensate customers hurt by poor financial advice in a bid to salvage trust, but investors can expect a smaller dividend.
Customers come first but dividends will soften: AMP
AMP Limited will carve out $290 million to compensate customers hurt by poor financial advice in a bid to salvage trust, but investors can expect a smaller dividend.
In a move to “reset business”, AMP Limited this morning said that it would accelerate advice remediation with $290 million set aside for potential compensation.
“Today’s announcement reflects our commitment to take decisive action to reset AMP and establish a platform from which the business can recover rapidly. We’re facing squarely into the issues that have impacted our reputation and the community’s confidence in AMP,” acting CEO Mike Wilkins said.
“Our remediation provision responds to industry-wide issues raised by ASIC… and reflects a conscious business response to increased community expectations.”
The embattled company will also cut fees on AMP’s MySuper products as of the third quarter of 2018 and will invest in stronger risk management products.
In an analyst call this morning, Mr Wilkins characterised the reduced fees as a reflection of AMP’s ability and willingness to “take advantage of the growth in superannuation in Australia”, which the bank is “ready to compete for”.
He said that the program will address employed and aligned advisers and is an “important milestone” in winning customers’ trust.
However, AMP also predicts to deliver an underlying profit for the first half of 2018 of $490 million to $500 million. The profit for the same period a year ago was $553 million.
The financial services giant said that investors should expect a total dividend payout for the 2018 financial year to come in at the “lower end” of its 70-90 per cent range. However, the interim dividend could be outside that range.
“Clearly, it’s been an unsettling first half for the company. The royal commission hearings in April and May and the subsequent leadership and board changes have already been well documented.
“In operating terms, the core Australian businesses have demonstrated resilience and shown solid growth in the first half. However, as we disclosed this morning, this growth has been offset by weakness in our Australian wealth protection business.”
The acting CEO argued that it was a sign of a good company that AMP Limited was “facing into” the challenges, adding that the company is now looking to the future.
AMP Limited was one of the worst hit by the financial services royal commission, with concerns raised that it had charged customers fees for services they didn’t receive and that it had possibly lied to the corporate regulator. Since those explosive hearings, the AMP Limited board saw the departure of its chairman, Catherine Brenner, and CEO, Craig Meller.
As of early July, the bank is facing five separate class actions.
Property
Property prices boosted by housing policies: RBA
The central bank has outlined the “pervasive” impact that policy has on property. ...Read more
Property
Labor’s ‘Help to Buy’ scheme not without its risks
With Anthony Albanese sworn in as Australia’s 31st PM, home buyers are excited at the prospect of accessing the new ‘Help to Buy’ scheme, but a property expert has warned that the risks may be g...Read more
Property
Australia's housing market is entering a ‘broad-based correction phase’
Westpac believes the housing market downturn is now underway. ...Read more
Property
ANZ now expects house prices will end the year lower
With higher interest rates on the horizon, the bank is forecasting larger house price declines than previously expected. ...Read more
Property
Which capital cities are most attractive to property investors?
A new survey has suggested that investor attention is shifting away from Australia’s two largest capital cities. ...Read more
Property
Market uncertainty fails to discourage foreign property investors
While interest from foreign investors in Australian property has remained strong, HLB Mann Judd warned that tax increases could see demand shift to other markets. ...Read more
Property
Regional renters forced to spend more of their income than ever before
Renters in regional areas are spending nearly as much on rent as home owners are spending on mortgage repayments. ...Read more
Property
Aussie home buyers now need to save for over 11 years for a deposit
Since early 2020, the time needed to save for a deposit has increased by more than two years. ...Read more
Wrapping up an eventful 2021
Listen now
What Omicron means for property, and are units right for first-time buyers? What is equity crowdfunding? Are industry super funds tapping into member funds to save their skins?
Listen now
Will housing affordability improve in 2022? Will buy now, pay later become the norm? Why are Aussies staying in failing super products?
Listen now
Who really benefits from crypto ETFs? How will the RBA respond to rising inflation? Could a mandate help address unpaid super?
Listen now
Property
Property prices boosted by housing policies: RBA
The central bank has outlined the “pervasive” impact that policy has on property. ...Read more
Property
Labor’s ‘Help to Buy’ scheme not without its risks
With Anthony Albanese sworn in as Australia’s 31st PM, home buyers are excited at the prospect of accessing the new ‘Help to Buy’ scheme, but a property expert has warned that the risks may be g...Read more
Property
Australia's housing market is entering a ‘broad-based correction phase’
Westpac believes the housing market downturn is now underway. ...Read more
Property
ANZ now expects house prices will end the year lower
With higher interest rates on the horizon, the bank is forecasting larger house price declines than previously expected. ...Read more
Property
Which capital cities are most attractive to property investors?
A new survey has suggested that investor attention is shifting away from Australia’s two largest capital cities. ...Read more
Property
Market uncertainty fails to discourage foreign property investors
While interest from foreign investors in Australian property has remained strong, HLB Mann Judd warned that tax increases could see demand shift to other markets. ...Read more
Property
Regional renters forced to spend more of their income than ever before
Renters in regional areas are spending nearly as much on rent as home owners are spending on mortgage repayments. ...Read more
Property
Aussie home buyers now need to save for over 11 years for a deposit
Since early 2020, the time needed to save for a deposit has increased by more than two years. ...Read more
