Ms Paterson is a senior legal practitioner who has joined AMP from CBA where she was the Executive Manager and Whistleblower Investigation Officer. Ms Paterson is responsible for leading whistleblower awareness, training and investigations across the business.

The appointment of Ms Paterson as the Group Whistleblowing Officer is the latest initiative to improve risk management and governance across AMP.

AMP Chief Risk Officer Jenny Fagg said: “Risk has been placed at the core of AMP’s culture and further enhancing risk management, governance and compliance continues to be a key initiative under AMP’s new strategy. We have appointed Anne-Marie Paterson as our Group Whistleblowing Officer in recognition of how seriously we take whistleblowing and to help people feel comfortable speaking up.

“We have also made significant progress to overhaul our governance and organisational structures to create better independence and oversight of issues. Our activity has focused on improving policies, processes and systems and increasing the use of technology to create efficiencies.”

AMP has delivered several major initiatives to improve risk management including:

• A new risk system that captures incident, issue and breach information more effectively, efficiently and consistently.
• New risk processes to manage interactions with regulators and provide more comprehensive regulatory reporting to management and the board.
• Upgrading processes and technologies to improve our ability to identify and prevent financial crime.
• Increasing capacity and the visibility of risk in all roles across AMP to effect cultural change.
• Stronger board governance including common membership between the AMP Limited and AMP Bank boards and now both the remuneration and risk committees consist of all
• non-executive directors. The audit committee is also now comprised of all non-executive directors other than AMP Chairman David Murray.

Ms Fagg said: “We are delivering on our mandate to improve the way we manage risk across AMP. Our stakeholders, including our customers, expect us to manage our risk effectively and the commercial return on doing so is profound.”

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AMP also announces that on completion of the sale of AMP Life to Resolution Life, Trevor Matthews will remain on the AMP Life Board as an AMP nominee and retire from the AMP Limited Board. Mr Matthews joined the board of AMP Limited in March 2014 and was appointed Chairman of AMP Life in May 2016.

Ms Hazelton brings significant experience from more than 30 years in global financial services, including as the local Chief Executive of Mizuho Bank in Australia and Commonwealth Bank (CBA) in Japan.

Ms Hazelton is a non-executive director on the boards of Treasury Corporation of Victoria, Persol Australia Holdings and the Australia-Japan Foundation, and previously served on the board of Australian Financial Markets Association. She is also a Non-Executive Director of AMP Capital Holdings Limited and will continue in this position when she joins the AMP Limited Board.

AMP Chairman David Murray said: “Debra’s leadership and experience within financial institutions as well as her previous appointments as a non-executive director will further strengthen the skills and expertise on the AMP board.

“As a director of AMP Capital Holdings, Debra already understands our business and our work to reinvent AMP as a more streamlined, sustainable business with a high-quality client offering.

“I would like to thank Trevor for his considerable contribution to AMP over the last five years. His deep knowledge of the life insurance industry will be a great asset to AMP Life, in which AMP will retain an ongoing economic interest.”

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Mr Roberts’ decision is due to the increasing demands on his time from both his executive role at SEEK Limited, and as a director of the AMP Limited Board and a number of AMP’s main subsidiaries.

Mr Roberts joined the Board in July 2016 and has been chairman of the Audit Committee since that time. During his tenure, he has also held positions as a member of the Risk and Remuneration Committees and as a non-executive director of the AMP Life Board. More recently, Mr Roberts was appointed to the AMP Bank Board, as chairman of the AMP Bank Audit Committee and as a member of the AMP Bank Risk Committee.

Following Mr Roberts’ retirement, Andrea Slattery will be appointed as Chairman of the AMP Limited and AMP Bank Audit Committees.

AMP Chairman David Murray said: “On behalf of the Board, I would like to thank Geoff for his considerable contribution to AMP, in particular as Chairman of the AMP Limited Audit Committee.

“Geoff’s extensive experience in financial services across Australia, Asia and Europe has been invaluable during a period of significant change at AMP. We have benefited from his knowledge and expertise and wish him well for the future.”

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AMP will work constructively with the government, regulators, advisers, trustees and other bodies to ensure that, as the recommendations move into definitive legislative reform, the outcomes are clear, simple and meet the best interests of customers.

The recommendations establish a solid industry framework and provide a strong basis for setting AMP’s future direction.

AMP remains committed to its purpose of helping customers manage and protect their wealth and to ensuring high quality financial advice is available and affordable for all Australians.

AMP has embraced the need for change and has already taken significant action to improve culture, governance, accountability and processes across the group including:

• The appointment of David Murray as independent Chairman of AMP Limited in June 2018.
• The appointment of Francesco De Ferrari as Chief Executive Officer in December 2018.
• Board renewal, including the appointments of three highly experienced financial services leaders as non-executive directors.
• The appointment of Alex Wade, as Group Executive, Advice.
• Acceleration of a coordinated advice remediation program.
• Appropriate consequence management including forfeiture of long and short-term incentives for a number of former executives and a reduction in Directors fees for 2018.
• Commitment to invest $100 million (pre-tax) over two years to strengthen risk management governance and controls.

There is more work to do as we are determined to earn back the trust of our clients, our shareholders, our regulators and the wider Australian community.

David Murray, AMP Chairman, commented “The financial services sector is a key pillar of the Australian economy, and it is essential that customers have trust in the services it provides. The Royal Commission’s final report will be a turning point for the industry, which has rightly been heavily criticised for its mistakes. AMP notes that the benefits of vertical integration remain available for customers while acknowledging that conflicts of interest need to be more effectively managed. The proposed regulatory changes will require serious and determined effort to implement but, with the support of industry, should deliver better outcomes for customers.”

AMP will review the recommendations of the final report in detail over the coming weeks and provide updates as appropriate.

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Andrea Slattery

AMP Limited has announced Andrea Slattery will join the Board as a Non-Executive Director, effective 15 February 2019, subject to usual pre-appointment processes.

Ms Slattery brings substantial experience from 14 years as a Managing Director and CEO in financial services as well as serving on high-profile board and advisory committees for listed companies and in the commercial, government and not-for-profit sectors for the past 11 years. She has 26 years’ experience in financial services, superannuation and retirement including establishing and leading the SMSF Association, which is the independent, professional body representing Australia’s self-managed super fund sector.

Ms Slattery is currently a Non-Executive Director at Clean Energy Finance Corporation, Argo Global Listed Infrastructure and the South Australia Cricket Association.

AMP Chairman David Murray said: “Andrea’s considerable experience in financial services as a business leader, non-executive director and an expert in change brings a strong mix of skills to the AMP board.

“Andrea has built trusted relations with government, industry and consumers, and been a strong advocate for the self-managed superannuation industry, and financial services in general. Andrea’s insights into financial advice, wealth management and superannuation will be very valuable to AMP as we continue to simplify and reset our business.”

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Mr De Ferrari succeeds Mike Wilkins, who has served as interim CEO since April 2018, and they will work together to ensure a smooth transition.

Mr De Ferrari will join the AMP Limited Board as an Executive Director at the first board meeting in January 2019. Mr Wilkins will return to his position as an independent Non-Executive Director on the AMP Board.

Francesco De Ferrari, AMP Chief Executive Officer, said: “I am proud to join AMP at such an important juncture for the company. AMP is an iconic organisation; it plays an important role in the financial wellbeing of Australians and the wider financial system.

“This year, AMP has faced into some of the most challenging days of its 169-year history. However, I strongly believe in the company’s purpose and I look forward to overcoming recent challenges and leading AMP’s return to growth.

“My immediate priority is to review the business model and develop our new strategy. The Royal Commission into the Banking & Financial Services Industry has provided an additional impetus for change in our business– and I’m determined we seize the opportunity.

“Our focus must be on doing better for our customers, shareholders and people. I’m committed to taking decisive action to continue the reset of the business; and to earn back trust in driving the recovery of AMP.”

David Murray, AMP Chairman, said: “I am pleased to welcome Francesco to AMP. As a proven change agent who thrives on the challenge of transforming businesses, his extensive experience in international wealth management and redesigning business models will be critical in creating the AMP of the future.

“The board looks forward to supporting Francesco as he leads the transformation of our business through significant external and regulatory change.

“I would like to thank Mike Wilkins for his leadership and stewardship of the company through recent challenging times. Mike has initiated substantial changes to pave the way for the new CEO, and I look forward to retaining his valuable insights and contribution as he returns to his position as a Non-Executive Director on the board.”

Mr De Ferrari has over 20 years’ experience in the wealth management industry including private banking and management consulting. He spent 17 years in executive roles at Credit Suisse in Asia and Europe, leading businesses that grew substantially under his leadership.

During almost seven years as Head of Credit Suisse’s Asia Pacific private banking business, he overhauled the operating model, increased assets under management and profitability, and improved culture and controls within the business.

As CEO of South East Asia and Frontier Markets, Mr De Ferrari was responsible for Credit Suisse’s business in Investment Banking, Global Markets, Private Banking in ASEAN and frontier markets across the Asia Pacific.

He was conferred the Institute of Banking and Finance (IBF) Distinguished Fellow Award in 2016 for excellence in professional stature, integrity and achievement in the financial industry. Credit Suisse won the Best Private Bank in Asia award four times in the past five years and Asian Private Banker named Mr De Ferrari Private Banker of the Year in 2015 for regional leadership in the private banking industry.

Previously, Mr De Ferrari led Credit Suisse Italy’s private banking operations in Milan where he transformed the onshore private banking business. During this time, he pioneered the concept of advisory mandates and implemented higher levels of transparency. He also has deep experience in dealing with remediation stemming from regulatory issues in various jurisdictions around the world.

He holds an MBA, awarded with distinction from INSEAD, and a Bachelor of Science in Economics and International Business from the Stern School of Business, New York University. He is married with five children.

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Mr De Ferrari will join AMP after 17 years with Credit Suisse where he was CEO South East Asia and Frontier Markets and Head of Private Banking Asia Pacific.

Mr De Ferrari will succeed Mike Wilkins, who has served as interim CEO since April 2018. Mr Wilkins will work with Mr De Ferrari to ensure a smooth handover before returning to his position as a Non-Executive Director on the AMP Board.

Mr De Ferrari will join the AMP Limited Board as an Executive Director at the first Board meeting in January 2019.

AMP Chairman David Murray said: “Francesco is an outstanding leader with a strong track record in international wealth management and extensive experience in redesigning business models to drive turnaround and growth.

“The Board conducted an extensive global search to identify the best leader to drive change at AMP. Francesco is a proven change agent who will bring the strategic acumen and expertise to spearhead the transformation needed in our business.

“During his time with Credit Suisse, Francesco built strong teams and successfully set a culture that balanced the interests of clients, shareholders and all other stakeholders. His experience of transforming and driving growth in businesses in Asia and Europe will be invaluable as he addresses the significant challenges facing both our business and the wider financial services sector in Australia.

“We have designed a remuneration structure to drive the recovery of AMP and recognise the degree of challenge in the task ahead. His remuneration and incentives are directly aligned with the interests of shareholders. With his track record of commitment to clients and business performance, I have no doubt Francesco is the right person to lead the recovery of AMP and set the strategy for future growth.”

Francesco De Ferrari, incoming AMP Chief Executive Officer, commented: “AMP is an iconic Australian company with strong, market-leading positions in wealth management, insurance and asset management. I feel very privileged to have been chosen to lead the business and to have the opportunity to set and shape its future.

“Throughout its history, AMP has been driven by a strong sense of purpose, helping customers plan for tomorrow and supporting them through the critical moments of their lives. While 2018 has clearly been a challenging year for the business, I’m confident we can earn back trust which will underpin the recovery of business performance.

“I’m encouraged by the process of change already initiated by the Board, and I’m committed to accelerating this change, while maximising the opportunities we have both in Australia and internationally.

“I am excited by the opportunity and am looking forward to working with Board and the team at AMP to restore the company to a position of strength and drive its future growth.”

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Mr Murray agreed to accept the chairmanship on 4 May 2018.  Following the completion of required appointment processes and the finalisation of some prior commitments, he has now joined the Board.

As previously announced, Mike Wilkins, AMP’s interim Executive Chairman, will return to the role of acting Chief Executive Officer.  Mr Wilkins will remain in this position until the transition to a new CEO at which time he will return to his role as a Non-Executive Director of the Board.

Mr Murray said: “I am pleased to today begin the task of rebuilding AMP as Chairman, working with the Board and management to restore trust in the company.

“AMP plays an important role in the Australian financial system, serving more than 3.8 million customers with products and services that are vital to the functioning of our economy.  Our business has undoubtedly been challenged by recent events but the Board will set the tone from the top as we drive change across the business.

“My immediate focus will be on renewing the Board and strengthening our governance framework.  Remediation of customers and rebuilding relationships with regulators will also be priorities.

“On behalf of the Board, I would like to thank Mike Wilkins for his leadership and his commitment to the company in stepping in as Executive Chairman over the past two months.  I’m looking forward to working with Mike as we take up the challenge of reinvigorating AMP.”

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Current Executive Chairman Mike Wilkins will return to the position of acting Chief Executive Officer on that date.

Mr Murray will lead the redevelopment of governance processes at AMP including a process of considered Board renewal and the appointment of an additional Non-Executive Director in the near term.

He will also work with Mr Wilkins in leading the search process for a Chief Executive Officer for AMP.  Following the appointment of a new CEO, Mr Wilkins will return to his role as a Non-Executive Director.

Mike Wilkins said: “We’re delighted to welcome a person of David Murray’s outstanding calibre to the Chairman’s role.  His appointment brings strong and experienced leadership to the company, strengthening our governance and our commitment to change.

“David has deep experience of financial services, particularly banking and wealth management, as well as the industry’s regulatory environment through his leadership of the Financial System Inquiry.  He brings a strong risk mindset and a clear appreciation of community expectations for AMP as well as the wider financial services industry.  This is part of the reset that is necessary for the company and I look forward to working with David, the Board and management to rebuild public confidence in the company and to restore shareholder value.”

David Murray said: “AMP employs almost 6,000 people many of whom are Australians serving its customers across wealth management, superannuation, financial advice, life insurance, asset management and banking.  It is a significant financial institution and needs to play a role within the Australian financial system which supports the building of trust and confidence in that system in the community. I look forward to working with the Board and executive management to support AMP’s people in achieving that outcome.

“As part of this, I am committed to meaningful board renewal but recognise the process must be measured so as to maintain the stability of AMP in the immediate future.  Restoring trust and confidence is not easy and does not happen overnight, but I am confident this can be achieved.”

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Peloton Partners launched to add value in succession planning.

Three  experienced financial industry advisers have launched a new specialist consultancy group aimed at helping wealth management advisers extract full value from their businesses.

Peloton Partners has been established by its three key principals, Rob Jones, Michael Harrison, and David Murray, who between them have more than five decades of direct experience working with institutions at various levels as well as financial planning and accounting businesses both large and small.

“Currently, many wealth management firms are not extracting the maximum value from their businesses mainly due to the inefficiencies of the existing model,” said Mr Jones. “Additionally, many feel disappointed when selling or merging their businesses because they do not feel the true value of their business has been reflected in the sale price.”

“We work with our clients to ensure they have the right game plan and effective tools for change to maximise their value and performance as part of either a long-term growth plan or in readiness for the potential merger or sale of their business.”

Peloton Partners uses a proprietary tool,  ifocus^TM , to review the current state of each individual wealth management business and identify what needs to be done to unlock specific opportunities for expansion or create competitive buyer tension.

“We have been through the succession and sales process many times ourselves and appreciate the effort, risk, emotion and cost involved,” said Mr Harrison. “Using our extensive experience, we help clients achieve outstanding results by ensuring they fully understand their business and therefore, its true value.

“This process gives our clients the choice of selling their businesses on their terms and conditions or continuing on with a revamped, more efficient and valuable business model.”

Since Peloton Partners was launched, it has reviewed and advised wealth management businesses with a combined total of $1.42 billion of Funds Under Management, an average tenure of 13 years, total revenues of $16.87 million, and close to 6,000 clients.

Some of the key issues identified by Peloton Partners include;

• Normalised profits needing to be 20% higher in order for the business to be sustainable;
• Annualised revenue growth needing to be at least three times greater;
• Inefficient use of IT platforms to give clients secure, reliable access to markets;
• Majority of the debt relating to over-priced book acquisitions which have not been properly integrated;
• Revenue being reasonably well diversified but was not strategically targeted; and
• Average advice fees being 0.6% which is materially lower than the target benchmark of around 1% of funds managed or equivalent fixed fee
• Segmentation of clients based on total fees charged rather than profit derived.

According to Peloton Partners, the total ‘un-extracted’ or ‘latent’ bottom line value assessed within these businesses was $2.7 million in EBIT uplift, which equates to nearly 50% of the total aggregated EBIT these firms are currently producing.

“Our estimate was that the changes we recommended would take between six and 36 months to implement,” said Mr Murray. “Given the average business tenure of these clients is 13 years, ranging from a start-up through to 25 years in business, this is a relatively short period of time to substantially improve the bottom line and overall business.”

“The impact of ongoing increased cash earnings and capital value is significant and dwarfs the cost of implementing our recommended measures,” said Mr Jones. “We are confident the individual firms can achieve on average at least 80% plus of the value uplift ascribed to them after specific risk factors have been applied to the firm.”

The key message from Peloton Partners is that wealth management firms need to look inward before looking outward.

“Resetting of their existing business model and fully extracting value from it should be their only priority before embarking on new business opportunities,” said Mr Harrison. “The end result will be wealth management businesses that are ideally positioned to deliver tomorrow’s services at the right price to the right clients while also adapting to changing industry and market conditions where necessary.”

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