AMP’s chief executive is confident the SMSF arm of the business will boost broader group’s profits at the end of this year.
The 2016 financial year report stated that SuperConcepts contributed $35 million from business operations to ‘other income’ in financial year 2016, an increase from $23 million in the 2015 financial year.
The revenue contribution from SuperConcepts largely offset some of the lost revenue occurring from lower advice fees received by licensees and a decline in the value of client registers.
SuperConcepts did, however, incur some operational costs due to the consolidation of its acquired businesses at a total cost of $26 million.
“The cost base of [the] business last year increased because we’re going through the process of integrating [a] series of acquisitions and putting it all onto one IT platform,” AMP chief executive Craig Meller said.
AMP also increased its share of the SMSF market to 9.2 per cent, which it mainly attributes to the acquisition of additional SMSF software clients as part of a strategic partnership with accounting software provider Reckon.
SuperConcepts now supports a total of 53,570 funds. It provides administration services for 16,321 funds and software services to a further 37,249 funds.
SuperConcepts “continues to grow its fund numbers and market through organic growth and acquisitions it is expected to benefit from scale and efficiency,” the AMP financial report said.
“We’re very optimistic about the go-forward outlook for that business, we expect it to start making a contribution to the group end of this year, beginning of next year,” Mr Meller said.
He added that there has been a strong take-up of AMP cash management accounts by SMSFs, but the flow of SMSF assets to AMP Capital has been limited.
“We’d expect the general flow for AMP and other external partners to grow over time.”
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