An AMP update on first quarter cash flows, assets under management (AUM) and wealth protection indicated total AMP SMSF customer accounts under administration fell from 15,462 at the end of December of 2014 to 15,181 at the end of March this year.
AMP SMSF assets under administration increased, however, jumping $809 million from the end of the fourth quarter last year to $19.7 billion at the end of the first quarter of 2015.
During the first quarter, AMP’s wrap platform, North, also saw a 7 per cent drop in net cash flows, which fell from $1 billion at 31 March 2014 to $926 million at the end of March this year.
North experienced growth in assets under management, however, with AUM increasing from $16 billion at the end of the fourth quarter in 2014 to $17.8 billion at the end of the first quarter of this year.
Total assets under management for AMP’s Australian wealth management businesses rose 6 per cent, from $109.5 billion at 31 December 2014 to $113.4 billion at 31 March 2015.
AMP chief executive Craig Meller said cash flows across the business were encouraging, particularly in the case of the North wrap platform.
“Our focus on Asia continues to deliver results and the insurance business remains in line with guidance,” Mr Meller said.
AMP has expended much time, effort and money in technology and positioning the AMP SMSF brand.
It would appear that the step into the SMSF space has been an expensive mistake. The AMP SMSF business model is not profitable (AMP results FY14) and AMP is now losing clients.
It may be time to make some tough decisions at AMP headquarters.
The AMP push into the SMSF sector has been an interesting case study. AMP has tried to win over trustees of SMSFs who historically shun advice from large financial institutions.
Over the past 3 years AMP & SuperIQ have made some very bullish statements about their position in the SMSF market. Generally the claim is to have between 80,000 to 100,000 SMSF accounts within 5 to 10 years.
AMP has spent heavily on investing in or acquiring established SMSF administration businesses (SuperIQ – $30M Cavendish $20M; Super Concepts/Tranzact/SmartSuper/YourSMSF). In addition AMP inherited Multiport from the AXA acquisition.