AMP reports big drop in SMSF Advice rep numbers
While growth in advice and SMSF services has helped boost revenue for AMP in the first half of 2018, adviser numbers in its SMSF Advice business have fallen by over 70 per cent.
In its results for the first half of 2018, AMP reported that other revenue, which includes SuperConcepts revenues and product fees, increased 11.8 per cent from $51 million in the first half of 2017 to $57 million this half.
Overall revenue for its Australian wealth management business increased 6 per cent from the first half of 2017 to $204 million in the first half of this year.
“The increase in operating earnings was largely due to higher other revenue and lower controllable costs reflecting business efficiencies and lower variable remuneration, which was partly offset by lower investment related income arising from margin compression,” the results stated.
The increase in other revenue, it said, was driven by “growth in advice and SMSF recurring revenues”.
Overall net profit for AMP in the first half of 2018 fell by almost 75 per cent to $115 million, due to an advice remediation provision of $290 million.
The results also indicated that SuperConcepts contributed $21 million from business operations to other revenue in the first half of 2018, a $1-million increase from the first half of 2017.
Across administration and software services, SuperConcepts added 7,520 funds during the first half of 2018 and now supports 66,643 funds, according to AMP, representing 11.2 per cent of the SMSF market.
“AMP currently provides professional administration services to 22,925 funds and software as a service to a further 43,718 funds. Total assets under administration in 1H 18 were $24.2 billion,” it said.
The number of advisers in its SMSF Advice business, which separate to the SuperConcepts business, has fallen 70.9 per cent, from 55 in the first half of 2017 down to 16 for the first half of 2018. AMP noted that there are financial advisers licensed to give SMSF advice in other networks also.
An AMP spokesperson said the drop was expected and part of AMP's plans to gradually wind down AMP's SMSF Advice business.
Commenting on its key priorities for the SMSF arm, AMP stated it will focus on developing a “strong SMSF capability with a focus on building scale, efficiency and profitable growth over the medium term”.
“As SuperConcepts continues to grow fund numbers and market share, it is expected to drive scale efficiencies to improve its operating profit contribution.”
It also plans to drive revenue growth for the wealth management arm by “partnering effectively across the AMP group to deliver investment solutions for retail, SMSF and corporate super customers”.