According to AMP’s Investor Report for FY19, total assets under administration was $19.7 billion, down by 26 per cent from FY18, largely reflecting client attrition.
Further, SuperConcepts contributed $35 million in revenue in FY19 from business operations, down by $8 million on FY18.
AMP also said it is reducing its range of superannuation products from around 70 down to six as it seeks to deliver “easy-to-understand” client propositions.
SuperConcepts chief executive Lara Bourguignon said 2019 was a year of major changes, as it resets its strategy towards consolidation and simplification.
However, she maintained that, despite the challenges of 2019, SuperConcepts is in a position to deliver on its long-term growth plans.
“We faced into a number of legacy issues from the five years of mergers and acquisitions and announced a three-year plan for organic growth,” Ms Bourguignon said.
“We’re also delivering on simplification of product sets to ensure our clients’ needs are best served to help grow their own businesses.
“Our focus has been consolidating technology stacks to ultimately bring efficiencies to our own business and to clients. This has been long and difficult work, but we have made strong progress and 2020 will see the benefits of our technology consolidation.”
AMP wealth management earnings slashed in half
AMP’s overall earnings in its Australian wealth management business fell by 49.9 per cent to $182 million in FY19, down from $363 million in FY18.
Further, the wealth giant noted it reduced its adviser network by around 440 advisers in FY19 as part of efforts to reshape its advice network to be compliant, professional and more productive.
AMP chief executive Francesco De Ferrari said 2019 was a year of fundamental reset at AMP.
“We rebased our business, set out a new group strategy and strengthened our capital base to accelerate the execution of our strategy,” he said.
Mr De Ferrari also noted AMP’s progress in prioritising client remediation, saying it expects to have completed 80 per cent of its program by the end of FY20, with completion in 2021.
“We have agreed the main outstanding areas of our program with ASIC, including for advisers who are no longer active in our network. We remain committed to putting it right for impacted clients as quickly as possible,” Mr De Ferrari said.
“In a period of unprecedented legislative and regulatory pressure, we have established a strong three-year roadmap of recovery. Our focus is now on delivery.”
Revenues tumbling as fund numbers continue the downward spiral. Surely its time to seriously cut overheads.
It looks like Ms Bourguignon has started with the Board of Directors as the Chairman of Directors – Richard Grellman & Independent Director Amanda Johnston-Pell have left the Board.
Post the slashing of offerings a large product team isnt needed & a continously ineffective sales force cant be retained.
A big dollar spend on acquisition that acquired 25k funds. 5 years of more dollars expended on a hoard of staff in sales marketing & product. Experienced onshore operators replaced by inexperienced offshore operations. Result fewer than 20k funds. Now getting smashed by businesses being run by former executive & general managers.
Larry we’re going down
Client attrition is one way to clear the backlog
How can 5 years of M&A activity with countless Senior Execs having delivery as a key area of performance only now have the business as ready to fulfill ong-term plans? A review of announcements during this same period reveals a repeated message about consolidation of businesses being complete or new businesses being purchased to further growth. Many Senior Execs have now moved on to bigger and better roles and are even in the media self promoting both time in and contribtiuon to the space. The proverb have your cake and eat it too comes to mind.
The last CEO really left things in a great state.
One can only imagine what will happen to this folly. No one will buy it so AMP is stuck with it.
Funds administered down close to $3k in 12 months. ASIC filings show that AMP have invested $120m capital into SuperConcepts. This includes a $10m injection in Dec19.
Of great concern is the reduction in revenue. In Aug19 it was reported that despite a decline in funds administered revenues were steady st $21m for the first half year.
Second half income is therefore only $14m. So is the annualised income now only $28m?
More weasel words from AMP regarding SuperConcepts. The simple fact is the buy everything you strategy of the previous CEO has failed & is the root cause of SuperConcepts issues.
Acquisition without an integration plan, the inability for the transformation team to integrate systems and / or the flip flopping on platform decisions has resulted in a mish mash of administration systems.
Client services failed to deliver & clients left in droves.
Ms Bourguignon is left to clean up the mess. The business that has cost over $100m to buy is pretty much worthless
Another Messy Problem
Yes its Chum