Blair Vernon, CEO of New Zealand Wealth Management (NZWM), has been appointed Acting CEO of AMP Australia while a process is conducted to find a permanent replacement.

Mr Vernon, who has led major change as CEO of NZWM, will commence in the role immediately, and Jeff Ruscoe will replace him as Acting CEO, NZWM.

AMP Chief Executive Francesco De Ferrari said: “We have a strong team in AMP Australia, who have been transforming the business, managing the successful separation of AMP Life, reshaping advice and increasing our focus on clients.

“I’m pleased we are able to call on an experienced executive in Blair Vernon to lead this team and continue to drive our strategy forward.”

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AMP AFLPA announce extension of their 20-year partnership.

AMP and the AFL Players’ Association (AFLPA) has announced an extension of their 20-year partnership to provide AFL players with default superannuation.

The re-appointment follows a comprehensive review process commissioned by the AFLPA and AFL, conducted by independent consultants.

AMP Australia Chief Executive Alex Wade said he was delighted to be continuing AMP’s long-term partnership with the AFL Players’ Association.

“This new agreement is strong recognition of the quality, competitiveness and security of AMP’s workplace superannuation offer.

“The quality and flexibility of AMP’s insurance offer, competitive investment management fees and insurance premiums, investment performance, diversified MySuper portfolios, and AMP’s comprehensive Financial Wellness and education programs, were all identified by the AFLPA as reasons for their decision.

“AFL football is an important part of so many people’s lives, and we’re committed to helping players manage their unique career and income profiles, and build sustainable long-term wealth,” said Mr Wade.

AFLPA CEO Paul Marsh said the review process highlighted that AMP’s offering remains best placed to service the unique needs of current and past AFL players.

“After an extensive independent review process, the AFLPA Board made the decision to continue with the AFL Players’ Association’s longstanding partnership with AMP,” he said.

“Through the review it was clear that AMP’s super fund was the preferred option to support the unique requirements of AFL players.”

AMP will continue to provide superannuation plans to more than 3,500 past and present AFL players as part of the agreement, and provide education services in conjunction with Shadforth Financial Group.

AMP partners with thousands of large and small businesses across Australia to provide superannuation to their employees.

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Alex Wade

AMP has released an educational e-book to help teach children good habits in money and finance.

Good Money Habits for Life is designed to assist parents and grandparents to pass on positive lessons and behaviours.

The e-book shows the key beliefs and attitudes that make a difference to how well we manage our money such as delaying gratification and having a savings goal. It then explains how to teach them to children by way of examples, stories and activities.

There are tips and strategies for talking to different age groups with the focus on making learning fun. The e-book also has sections on contemporary money issues such as dealing responsibly with debt and money in a cashless society.

AMP Australia CEO Alex Wade said the company regarded boosting financial literacy as a key strategy in helping Australians reach their financial goals.

“If we can educate kids and get them practising these good behaviours early it will make a profoundly positive difference to their lives, including driving stronger engagement with their wealth goals and retirement planning.  The earlier this happens the better the long-term outcomes,” he said.

The idea came from AMP employee and mother of two, Resselle Hrelja.

Ms Hrelja said she was motivated by the goal of having her children reach their potential.

“As a parent, I cannot make my children’s dreams come true. They will need to do that on their own. But I want to arm them with skills, knowledge, wisdom and enough heart to get them through their life journey.” she said.

You can download the e-book here.

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Alex Wade

Entries are now open for the 2020 AMP University Challenge, a national competition where university and TAFE students can try their hand at being a financial adviser and have the chance to share in $10,000 prize money.

The competition is open to all Australian tertiary students, whether or not they are studying financial planning.

AMP Australia CEO Alex Wade said the company wanted to promote a new generation of advisers to take the industry forward amid a growing need for high quality, professional advice.

“Financial advice is a great career and can have a profoundly positive impact on the quality of life of those who receive advice.

“The AMP University Challenge is an ideal platform for talented students to showcase their capability and kickstart a career in the industry.”

Competitors who enter now will receive their first assignment on 2 March – devising a financial plan for a hypothetical couple.

Students can enter individually or as a team and the top entrants will be brought to AMP in Sydney in October to compete in the finals, a challenging series of activities and quizzes that will decide the ultimate winner.

Since the competition began it has been integrated into the curriculum and assessment for students studying financial planning majors at Charles Sturt University, Deakin University, Griffith University, TAFE NSW, Western Sydney University and University of Wollongong.

Previous competitors – including 2017 winner Monica Rayos – have subsequently become AMP advisers after competing in the University Challenge.

Mr Wade said: “AMP’s decade-long commitment to the University Challenge reflects our determination to promote the benefits of financial advice and drive high standards of integrity and professionalism in the industry.”

Learn more. 

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Alex Wade

AMP has announced it will introduce annual agreements for clients who currently receive ongoing financial advice. The new system will be introduced during 2020, while ongoing advice agreements will be phased out, for both its aligned and employed advice networks, who are being notified today.

AMP Australia CEO Alex Wade said the move to annual agreements was a step forward in the evolution of AMP’s financial advice business.

“We have been considering the best way to charge for financial advice and factored in a range of issues including client sentiment, pending legislative change, operational matters and increasing compliance requirements”, Mr Wade said.

“We think annual agreements best serve the interests of clients who want advice over a period of time.

“There are many ways that Australians want to experience financial advice. We believe there is a strong need for enduring relationships between clients and advisers, as well as more episodic advice and ad-hoc advice, where digital solutions will have a role to play.”

At the start of an annual agreement, the client and the adviser explicitly agree the services to be provided and fees paid, an arrangement which expires after 12 months.

“Annual agreements will ensure optimum transparency in the relationship between clients and advisers, while simplifying administration and compliance for advisers,” Mr Wade said.

Mr Wade said the change was being introduced over 12 months to give clients and advisers time to adjust.

“We recognise this is an adjustment for many advisers and we’ll be helping them with guidance, tools and templates to help implement the change in their business,” he said.

The agreements will be administered on AMP’s new technology platform for advisers, which will simplify set up and management and ensure high standards are maintained across the adviser network.

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AMP Chief Executive Francesco De Ferrari said the internal combination reflected AMP’s client-led strategy, and followed the decision by Sally Bruce to step down as AMP Bank CEO.

The AMP Australia business will be led by Alex Wade, currently CEO of Australian Wealth Management. Rod Finch, currently Managing Director, Wealth Products and Platforms, has been appointed to take the role of Managing Director, AMP Bank, reporting to Mr Wade, when Ms Bruce steps down on 1 November 2019.

Francesco De Ferrari commented: “The strategy we set out in August is focused on reinventing AMP to be a client-led, simpler and more growth-oriented business. Bringing together our bank and wealth management teams in Australia will drive a more integrated organisation better able to pursue the significant opportunity we see in providing more holistic wealth services for our clients. Closer integration of the businesses was part of our long-term plan, and with Sally’s decision to step down we have been able to accelerate our internal reorganisation.

“Sally has been an outstanding leader for AMP Bank, delivering double-digit earnings growth, through consistent growth in revenue and client numbers, as well as creating a strong and inclusive culture within the bank. She has led the business for just over four years and has decided it is time to transition. I want to thank Sally for her contribution, and particularly for her support to me over the past ten months.”

Sally Bruce said: “I am extremely proud of my time with AMP and what we have delivered at AMP Bank since I joined in 2015. Now is the right time for me to step down and to join my family, who relocated back to Melbourne earlier this year.

“I’m confident I am leaving AMP Bank in the hands of a strong team who will continue to drive the success of the business under AMP’s new strategy.”

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Alex Wade

Ask anyone on the street if they are confident to compare super funds and you’ll likely have them scratching their heads. For our industry to rebuild trust and become more transparent, we need a better way for all Australians to compare super funds, so they can cut through the ‘noise’.

That’s why AMP is welcoming APRA’s moves to overhaul the way superannuation data is collected and reported. As an industry we need a better system to help Australians more effectively compare products based on key indicators such as returns, fees and importantly, their appetite for and ability to withstand risk.

Currently, Australians are forced to calculate and compare their superannuation based on obscure industry measures, such as unit pricing, to benchmark their fund against the market. Furthermore, consumers can’t rely on government comparisons because the data is inconsistent and inadequate.

APRA’s decision to move to a simpler and more consumer-friendly traffic light system or heat map will potentially give super funds a rating of green, amber or red based on returns, insurance, fees and fund sustainability. This is good news for consumers if it helps arm them with the right information to help assess how their fund is performing in an easily accessible format. While we haven’t yet seen the detail, we support the intent of making super easier to compare, and look forward to contributing to discussions when more detail is released.

However, it won’t be an easy task. Currently, all funds are required to publish the investment risk of each fund under APRA product dashboard reporting requirements. This is one measure, and on its own, is not likely to be understood by members and needs greater understanding and effectiveness for making comparisons. Particularly given the measure itself is based on the probability of loss, rather than the size of loss, and is not used by managers as genuine indicator of risk.

Beyond this, many funds appear ranked based on returns and fees alone – and while both incredibly important measures – comprehensive comparisons will require APRA to take risk into account. At present, many members rely on fund labels such as “balanced” to inform their judgement, without realising that the underlying risk in these funds can be quite different.

While it might be appropriate for someone in their twenties, who is able to ride out the highs and lows of the market, to concentrate on returns and fees alone; steering someone in retirement or towards the end of their working life to a product that may have high returns, but carries significant risk, could be disastrous in the event of a downturn. This is especially the case when they have a limited horizon in which to recoup those losses, while they simultaneously draw down on their remaining balance to fund retirement.

People need to be able to understand what risk their fund is taking. The greater the transparency, the better placed consumers are to make an informed decision. One thing for certain is that markets rise and fall, and you don’t want to get caught at the tail end of a downward cycle. A fund that is rated “green” will be considered an endorsement, so the methodology must be appropriate for the members’ needs.

Currently, there are no standard guidelines for classification of growth and defensive assets in superannuation. This makes it particularly difficult for consumers to make apples with apples comparisons when trying to assess performance in line with risk.

We are seeing an increasing number of industry and retail funds investing in unlisted property and infrastructure labelling the investments as defensive.

In recent times these investments have performed well, boosting returns for the funds. But there is no doubt they lack transparency, and in the event of a downturn they may carry considerable risk.

APRA needs to come up with a system to accurately compare funds – risk should be firmly on the table and reflected in the comparisons. We acknowledge that this is not an easy task for APRA, given the industry itself has debated with this issue for some time.

As an industry we must all start working together to find and agree to the right methodology that makes it easier for Australians to accurately compare their super products. We’re not there yet.

These issues are still being debated by the industry. AMP will contribute to APRA’s consultation process and will support an outcome that genuinely serves to ensure Australians can choose the right fund for their individual situation.

As an industry, we need to reduce complexity and show we genuinely have our members’ best interests at heart. We have been debating the quality of data and difficulty in comparing super for years. The time has come to get it right, and the right measure will keep the industry accountable.

By Alex Wade, chief executive officer Australian Wealth Management

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Alex Wade

AMP Australian Wealth Management CEO Alex Wade discusses how the wealth management industry needs to step up to help Australians fund the future they deserve.

If AMP doesn’t step up and lead with a solution for Australians to get the advice they need to protect and grow their wealth, who will? With a relatively small and ageing population, it is not in the best interests of Australia, or Australians, to put additional pressure on the public purse. The government knows it and we know it. While the government has a role to play, this is primarily something we can solve ourselves, if Australia’s financial sector steps up.

Consumers are absolutely open to enhanced financial advice. ASIC’s report into consumer perceptions of financial advice released yesterday shows that barriers such as high cost, loss of trust and a perception that advice is only for the wealthy could prevent more than 40 per cent of our population from seeking advice. But ASIC found the more customers know about advice, the more favourable they are.

Wealth is highly concentrated in Australia, with the average net worth of the top 20 per cent of households being more than 93 times larger than the lowest 20 per cent, according to the latest ABS statistics.

With Australia’s rich getting richer, there remains plenty of organisations prepared to help them. But who will help everyone else? Some of the biggest players in financial advice are retreating and conservative estimates are that at least one in every three financial advisers will leave the sector over the next two years.

This wave of departures from the sector is expected to put around $900 billion of client wealth into play over the next five years and these Australians will need help and advice so they can continue to build a strong financial future and reduce reliance on the government as they age.

One in two adults – that’s 10 million Australians – have financial needs that aren’t being met. That’s not an AMP assessment, it’s the official research from the Productivity Commission. As ASIC concluded, once people receive advice, they have more positive attitudes toward it.

Australians deserve to enter retirement living the lifestyle they have dreamed of during their working lives. For many, that may involve a decent super balance, their home paid off and enough money to spoil the grandkids.

However, the risk is that many won’t get there because they don’t make the right choices earlier on in their life, often due to a lack of awareness and help, or they leave their retirement planning too late. It’s this group of Australians we need to better support.

Our current regulatory model largely supports face-to-face advice. A significant focus has been on compliance and boosting professionalism, and I think we can all agree the industry has learnt some important lessons in recent years. We will be better for it.

But the most immediate and significant challenge for leaders in the wealth management industry today, is to come up with a solution to deliver compliant and affordable advice for the masses. And we must do so while navigating this period of disruption, regulatory scrutiny and market dislocation. Because today’s advice, while valued by those who can afford it, is too expensive for most Australians. ASIC’s latest research supports this.

Our wealth philosophy is around ‘whole of wealth’ needs, helping people at all stages of their lives. But the growing need and demand is to build an advice solution for all Australians that is “life led” helping Australians at the key moments when they need financial advice the most. For example, how to invest an inheritance or redundancy, better manage their super and how to pay off their mortgage faster.

This is a new kind of advice to help those Australians that don’t need or can’t afford holistic face to face advice. It’s advice at a price point that suits, delivered in a way that suits – digitally – and this could be online, phone, video, or robo.

The big change is how those conversations happen. In the same way bank customers no longer need to head into a branch during the working day, financial advice clients can now choose how and when they want to receive advice. It’s thriving overseas, particularly in the US, and Australians are known for their appetite for digital and online transactions in shopping, travel and food.

Coupled with the complexity of our tax and retirement systems and our ageing population, the imminent digital disruption is why we need to act fast.

It is not a simple solution. We need to accelerate discussions with the regulators, the government and other industry players who share the same passion for quality financial advice. The Financial Services Council annual Summit starts today in Sydney, bringing together all elements of the sector for the first time since the Royal Commission’s final report was handed down. The theme is “Shape Your Industry” – a thinly veiled directive to the finance sector to work together to build a stronger and better industry to meet the demands of consumers. In financial advice, AMP is taking up the mantra, engaging with government, regulators and industry to shape the way forward. We need to build a regulatory framework that supports these newer advice channels such as digital and robo. This will take collaboration and commitment.

We have a moral obligation to do so. An Australia without advice is an Australia failing to reach its potential. Demonstrating the value of advice is the starting point for the sector and an issue the industry and government are working on. Even one piece of quality financial for a younger person can significantly change their financial future. It’s too important to fail.

The post Standing up for the future of advice appeared first on AdviserVoice.

Alex Wade

AMP has announced a series of fee reductions to its flagship MyNorth wrap platform, benefiting more than 85,000 clients.

The reductions will provide significant savings for existing and new superannuation, pension and investment clients, taking effect on 1 May 2019.

AMP’s CEO, Australian Wealth Management, Alex Wade said, “We’re pleased to be reducing fees for existing and new clients of MyNorth – AMP’s flagship wrap investment platform.

“In the last twelve months we’ve continued to improve MyNorth, including adding a range of managed portfolios, the Advantage Fund Series, and enhancing the platform’s adviser reporting and modelling functionality.

“Following these fee reductions, MyNorth will be one of the best value wrap platforms in market and will compete very strongly on price across a range of account balances.

“Advisers and clients continue to respond favourably to MyNorth’s fee-free working cash account which offers a leading interest rate compared with peers. This is in addition to a range of even higher rate cash investment options available through the platform.

“Families will also benefit from the changes, with MyNorth becoming one of the first wrap platforms in which six family members can join together to reduce administration fees, saving hundreds of dollars each year.

“The changes reflect AMP’s heightened commitment to improving client outcomes, and follow our recent MySuper fee reductions, which have benefitted more than 600,000 AMP clients.”

The reductions include:

• Lower administration fees across the platform’s two investment menus, Select and Choice, of up to 0.10 per cent and 0.20 per cent p.a. respectively.
• Overall lower administration fee caps for individual clients and families (by up to $700 per family group).
• Families can team up with six members (up from four members) to save on administration fees and reach the family administration fee cap sooner.
• Lower MyNorth index investment management fees of 0.10 per cent p.a.
• MyNorth clients can also continue to take advantage of MyNorth’s leading working cash account interest rate, which has no fees attached.

According to Strategic Insights’ latest market analysis MyNorth is one of Australia’s fastest-growing wrap platforms^[1]. Since launching in early 2016 it has grown to more than
$24 billion AUM as of February 2019.

Overall, AMP’s North platform, of which MyNorth is the contemporary offer, received close to A$4 billion in net cash inflows in 2018.

———-

[1] Strategic Insight, Marketer View September 2018

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2017 AMP University Challenge finalist, Clive Moyo

The pens are poised, and the calculators are at the ready as tertiary students from around Australia set out to conquer the 2019 AMP University Challenge.

Applications for the 2019 competition are now open to students looking to expand their skillset and explore the financial advice industry.

Hopeful competitors who register now for the competition will receive  a hypothetical client case study in a week’s time on 4 March, from which they will be asked to devise a financial plan with the aim of impressing the competition’s judges.

AMP Group Executive, Advice, Alex Wade said the competition gives students first-hand experience of what it is like to be a practising financial adviser.

“An event like University Challenge shows AMP is committed to developing the next generation of advisers to help provide quality advice to more Australians,” Mr Wade said.

Now in its ninth year the AMP University Challenge is a key pillar of AMP’s strategy to support and invest in high standards of education and professionalism in the financial advice industry.

Since the competition began it has been integrated into the curriculum and assessment for students studying financial planning majors at Charles Sturt University, Deakin University, Griffith University, TAFE NSW, and Western Sydney University.

Mr Wade said supporting future generations of financial planners through initiatives like the AMP University Challenge was vital to the industry, particularly with the introduction of new, higher education standards for advisers.

“The AMP University Challenge reflects AMP as an innovative industry leader, a pioneer in raising standards in financial advice, and an advocate for professionalism and quality in the industry,” Mr Wade said.

“AMP University Challenge reflects the values and attributes of the industry – professionalism, integrity, and customer focus.”

The teams or individuals who provide the best competition entries over the next seven months will be selected to compete during the October final at AMP’s Circular Quay headquarters.

There finalists will mix with senior advice professionals and leading finance academics while exploring career opportunities at the headquarters of Australia’s largest network of financial advisers.Previous finalists – including 2017 competitor Clive Moyo – have subsequently pursued roles at AMP after competing in the University Challenge.

Mr Moyo secured a role in AMP’s Customer Engagement Team after entering the University Challenge and before graduating from TAFE NSW.

Mr Moyo said the competition provided a collaborative and supportive environment and cemented his decision to become a financial planner.

The competition is open to all full or part-time Australian tertiary students.

Enter here. 

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