Both Mr Finch and Ms Bourguignon, who is joining from National Australia Bank (NAB), will report to AMP’s Group Executive Wealth Solutions and Chief Customer Officer, Paul Sainsbury.

In his new role Mr Finch will be responsible for AMP’s superannuation and platform products, which represented assets under management (AUM) of A$130 billion at 31 December 2017.

Ms Bourguignon, currently General Manager, Customer Experience Super at NAB subsidiary MLC, will be responsible for strategic marketing and customer experience, including data and analytics capabilities, across AMP’s wealth management businesses.

“Rod and Lara are proven leaders who bring considerable wealth management expertise to their respective roles,” said Mr Sainsbury.

“Both roles are essential to AMP’s growth strategy and in delivering great solutions to help our customers and advisers achieve their goals.

“Rod will drive the continued investments we’re making in our market-leading superannuation products and investment platforms, while Lara’s focus will be providing personal, engaging and highly relevant customer experiences,” said Mr Sainsbury.

Mr Finch’s new role will take effect from 3 April 2018. Ms Bourguignon is expected to join AMP in late April.

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Paul Sainsbury

AMP has launched a new goals-modelling engine, creating the most sophisticated and contemporary advice experience in the industry.

The engine represents a major step forward in AMP’s goals-based customer strategy.

Now part of AMP’s Goals 360 experience delivered through AMP Advice, the engine provides customers with clarity on how the choices they make today impact their ability to achieve their goals over time.

Purpose-built stochastic modelling, developed with leading analytics and technology firm Milliman, factors in economic and market conditions to generate advice strategies to provide customers a projected achievability of their goals.

Tailored cashflow, debt, wealth protection and other wealth management advice strategies are generated in real-time and presented through a seamless, interactive digital experience, developed using human-centred design.

AMP’s Group Executive Wealth Solutions & Chief Customer Officer, Paul Sainsbury said the launch of the modelling engine is a landmark moment for the financial advice industry and the latest step in AMP’s transformation of the goals-based advice experience.

“The engine is the culmination of a multi-year investment program to build AMP’s advice capability of the future,” commented Mr Sainsbury.

“We’ve custom built the engine around goals because we know that when delivered well, goals-based advice transforms the lives of our customers.

“The engine now forms an integral part of AMP’s Goals 360 – a contemporary advice experience for advisers and their customers.

“Underpinned by the latest in financial modelling capability, the engine demonstrates to customers in a visual and engaging way how the choices they make today impact the ability to achieve their goals over time.

“For advisers, it supports richer conversations and helps build stronger relationships with their clients. The engine also creates a more efficient process for advisers – reducing their cost to serve and allowing for ease of compliance.”

The goals engine is being progressively rolled out to AMP Advice practices from this week.

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Paul Sainsbury

AMP Limited has formalised a partnership with US advice business United Capital, signing an agreement to collaborate as AMP develops its new wealth management operating system.

United Capital is one of the fastest growing financial life management businesses in the US, with a goals-based advice approach and philosophy similar to AMP.

The agreement builds on an existing relationship between the organisations and includes a non- material investment by AMP into United Capital and the development of a partnership plan to share intellectual property. It is in line with AMP’s strategy, which includes strengthening its core goals- based advice capabilities through a new wealth management operating system.

AMP’s Group Executive Wealth Solutions and Chief Customer Officer, Paul Sainsbury said: “We have known United Capital for some time and greatly admire its approach to advice.

“It is regarded as one of the most innovative advice businesses in the US, having grown rapidly from start up to more than US$19.8 billion in assets under management.

“Our shared philosophy in helping customers through goals-based advice, together with United Capital’s innovative use of the Salesforce platform, creates significant potential for learnings and synergies as AMP implements its new operating and CRM systems,” said Mr Sainsbury.

As part of its new wealth management operating system, AMP will later this year launch a new goals modelling engine which generates personalised advice solutions based on customer goals and financial circumstances. The full operating system is scheduled to be completed in the first half of 2018. AMP’s advice business is also currently implementing Salesforce as its new customer relationship management (CRM) system.

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Paul Sainsbury

AMP  has announced that Western Australia’s Water Corporation Superannuation Plan will transfer to AMP’s SignatureSuper master trust.

The  Water Corporation Superannuation Plan currently has more than 3,500 members and $450 million in funds under management.

AMP  was selected after an extensive tender process to find a fund that was competitive on price, delivers a high-quality customer experience and can help members with their financial wellbeing.

AMP  Group Executive Wealth Solutions and Customer, Paul Sainsbury welcomed the Water Corporation superannuation members to AMP SignatureSuper.

“We  are delighted to help support the financial wellbeing of Water Corporation’s  employees. Customers will have access to  a range of investment options, digital tools and educational resources to help them manage their super savings and achieve their retirement goals,” he said.

The  selection follows independent superannuation and actuarial consultancy, Heron naming AMP SignatureSuper as the top-rated corporate product in Australia and AMP SignatureSuper as the top-rated pension product.

AMP  is a market leader in retail corporate superannuation with more than $28 billion in assets under management and a provider of superannuation services to more than 60,000 employers.

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AMP.NATSEM Report outlines the cost of divorce.

It takes five years for divorced couples to recover their financial position following separation, according to new research released by AMP yesterday.

The latest AMP.NATSEM report – For Richer, For Poorer: Divorce in Australia – discovered the financial fallout of divorce not only decimates savings and assets but threatens the ability for many to get back into home ownership, accumulate adequate superannuation and provide desired education outcomes for their children.

AMP Chief Customer Officer Paul Sainsbury said with one in three Australian marriages ending, divorce has become a major financial shock for many Australians.

“Understandably, most couples don’t plan for divorce,” said Mr Sainsbury. “This lack of planning, combined with the significant disruption and emotional distress of a divorce, often means finances are a lower priority and mishandled during a separation.

“And with Australians now tending to divorce later during our mid 40s and prime wealth-accumulating years – the long-term financial impacts can be considerable.”

The 39th AMP.NATSEM report found:

• Divorced parents aged between 45-64 years of age have 25 per cent less assets than their married counterparts.
• Super balances for divorced mothers are 68 per cent lower than married mothers while on average a divorced mother has 37 per cent less super than a divorced father.
• Divorced fathers aged between 45-64 still have 60 per cent less superannuation than married fathers five years after a marriage breakdown.
• More than 20 per cent of newly-divorced mothers are struggling to afford basic items including school uniforms and leisure activities.

Mr Sainsbury said having a solid financial foundation in place could help people achieve their financial goals regardless of what life throws their way. He said being prepared for a financial shock such as divorce could in fact shave a year off the five-year recovery period.

“A marriage breakdown is devastating for your finances in the near term and its impact can continue into old age and have serious consequences for financial living standards and retirement prospects later in life,” Mr Sainsbury said.

“Being financially independent and actively engaged with your finances and planning ahead for financial challenges such as divorce can go a long way towards reducing its harmful effects.”

The AMP.NATSEM report found homeownership remained out of reach for many divorced parents. Five years after a marriage breakdown, 40 per cent of divorced mothers and 32 per cent of divorced fathers still live in rental accommodation.

Overall, homeownership rates for divorced couples are also 15 per cent lower than married couples.

NATSEM Director and author of the report, Professor Laurie Brown, said the effects of divorce can influence children’s education outcomes.

“A family breakdown decreases a child’s chance of getting a university education by 6 per cent,” Professor Brown said.

Other key findings for the report include:

Employment and income

There is a significant increase (14%) in the proportion of women returning to the workforce following divorce, however their income is approximately 10 per cent lower than married women.

Meanwhile divorce has little impact on the employment status of men. The income of a divorced father is 26 per cent higher than the income of a matched married father.

Divorced mums are under financial stress

If families are under financial stress most of the household budget is spent on necessity goods.
Newly divorced mums spend 66 per cent of their household budget on basic necessity items such as groceries, clothing and utility bills.

In contrast, married mothers and fathers spend 54 per cent of their household budget on these items.
Childcare cost strain

30 per cent of divorced mums find the cost of childcare difficult despite their contribution towards the costs of childcare being 33 per cent less than divorced dads.

Family breakdown increases a child’s chance of becoming an early school leaver

In 2014, one in five adults aged 25-44 years whose parents were divorced when they were fourteen had left school before they completed high school.

Family breakdown decreases a child’s chance of getting a university qualification by six per cent. For those who lived with both parents only one in ten didn’t complete year 12.

State by state

Tasmania has the highest number of divorcees (14.8%) in Australia, closely followed by Queensland (14.3%). Victoria and New South Wales have the lowest (10.5% and 10.8% respectively).

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AMP Chief Executive Craig Meller said the new group structure delivers sharper  focus on performance in the core Australian businesses, drives efficiency  across the group and provides increased emphasis on the growth drivers in the portfolio.

The key changes to the group leadership team are:

• Wealth Solutions and Customer: Paul Sainsbury will lead a new division bringing together customer, wealth  management and product solutions.
• Advice and New Zealand: Jack Regan, currently Managing Director New Zealand, will lead an expanded  portfolio, assuming responsibility for AMP’s advice businesses. Mr Regan will retain responsibility for the  management of AMP New Zealand.
• AMP Bank: Sally Bruce will join the  group leadership team as Group Executive, AMP Bank.
• Insurance: Megan Beer will be appointed Group Executive, Insurance, bringing single point accountability to the stabilisation and management of the insurance business.
• Technology and Operations: Craig Ryman will become Group Executive, Technology and Operations, assuming an expanded portfolio combining IT and operations.
• Enterprise Risk Management: Saskia Goedhart, Chief Risk Officer, will join the group leadership team.

The leadership changes are effective 1 January 2017.  Management of the other divisions remain  unchanged.  An updated structure chart and biographies are attached.

As a  result of the changes, three executives will leave the organisation: Pauline Blight-Johnston, Group Executive, Insurance, Super and Risk Management; Rob Caprioli, Group Executive, Advice and Banking; and Wendy Thorpe, Group Executive Operations. Ms Thorpe had previously advised her intent to retire and will leave the business in early  2017 after helping to ensure the smooth transition of the operations  function.  Ms Thorpe will also shortly  join the board of AMP Bank as a Non-Executive Director.

“I would like to thank those  executives who are leaving the organisation for their contribution to AMP and  to the transformation of our core Australian business during the past three  years.  I wish each of them well for the future,” said Mr Meller.

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The new name, SuperConcepts, incorporates the range of services the business now offers  including SMSF administration, education and software services.

Existing brands including AMP SMSF Solutions, Ascend, Cavendish, Justsuper, Multiport, SuperIQ,  SuperMate and yourSMSF will operate as sub-brands of SuperConcepts. The  business will remain wholly owned by AMP.

Natasha Fenech will continue to lead the business, moving from her role as Managing Director, AMP  SMSF to the role of Chief Executive Officer, SuperConcepts.

“We have grown considerably over the last year, both organically and through a number of strategic  acquisitions, increasing our scale and efficiency in a rapidly growing and highly-fragmented  SMSF administration market,” Ms Fenech said.

“This change  unifies our businesses and teams, better positioning us to pursue the next  phase of our growth strategy, which will be driven by high-quality customer service, access to a range of market leading SMSF product providers and the ongoing delivery of a superior SMSF software solution, SuperMate,” Ms Fenech  said.

The SuperConcepts brand, which has been operating in the SMSF market since 1985, was selected after extensive market testing.

“We know from our research that the brand is well regarded, trusted and resonates with our customers across all of our services,” Ms Fenech said.

Customers will not experience any immediate change to how they interact with their provider. All customers are encouraged to contact their relationship manager with any questions.

Appointment of SuperConcepts board and leadership team

The SuperConcepts business will be supported by its own board, including a non-executive chairman  and five directors, to continue with the strategy to grow the scale of the business.

Mr Richard Grellman AM has been appointed as Chairman of the board. Mr Grellman has significant experience in financial services, gained through more than 30 years at KPMG and a number of roles as Chairman and Non-executive director of several public  companies, including Crowe Horwath.

Other appointees to the board include:

• Andrew Bloore, former Chief Executive Officer, SuperIQ
• Jonathan  Deane, Chief Innovation Officer, AMP
• Stuart  Forsyth, Director and Consultant, McPherson Super Consulting and former ATO  Assistant Deputy Tax Commissioner for Superannuation
• Paul  Sainsbury, Chief Customer Officer, AMP
• Natasha  Fenech, Chief Executive Officer, SuperConcepts

“We’re excited by the knowledge and expertise the new board will bring to our business,”  Ms Fenech said.

In addition, a new leadership team comprising nine people has been established to support the  growth of the SuperConcepts business.

Stephen Doulgeridis, founder of Justsuper has been appointed as General Manager, Business Development, while former Supercorp Chief Executive Officer, Kurt  Groeneveld, has been appointed as Chief Technology Officer.

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Paul Sainsbury

Average Australian household debt is four times what it was in 1988, rising from $60,000 to $245,000 after inflation, according to the latest AMP.NATSEM Income and Wealth report –Buy now, pay later: Household debt in Australia.

The ratio of household debt to disposable income has almost tripled, from 64 per cent to 185 per cent during the same time.

Declining interest rates, low unemployment and a strong economy have driven Australians to take on more debt and at the same time cushioned the impact of repayments.

But if interest rates were to rise by 2.5 percentage points, interest payments for Australia’s most indebted households with mortgages[1] would rise to at least 58 per cent of household income, up from the current 42 per cent. These households would need to find an extra $16,615 a year just to cover interest payments, which would increase from $43,926 to $60,541 a year.

For households with mortgages and typical levels of debt, a 2.5 percentage point increase would mean debt repayments would rise from 16 per cent to 23 per cent of income, taking annual interest payments from $15,464 to $21,687, or an extra $6,223 per year.

Other findings from the report include:

• Typical households headed by 30 to 50 year olds have been hit the hardest with their debt to income increasing from 149 per cent to 209 per cent during the past 10 years.
• For people aged over 65, mortgages make up almost a third of their household debt – up significantly from 20 per cent 10 years ago.
• For low-income households, debt is 43 per cent of their disposable income, almost doubling since 2004.
• The top 10 per cent most leveraged Australian households now have an average debt to disposable income ratio of 600 per cent.

AMP Chief Customer Officer Paul Sainsbury said the findings emphasise the need for Australians to more actively engage with their everyday finances.

“With debt becoming a bigger part of our lives, we must recognise the stark difference between good and bad debt. Good debt builds wealth, bad debt diminishes it.

“Bad debt is like compound interest in reverse – small financial decisions now can greatly influence long-term debt balances and the amount of interest we pay.

“This can have a profound impact on our wealth in later life and ability to enjoy the retirements we aspire to.

“We need to better manage our finances, including our everyday cashflow, as part of a clear long-term plan to pay down debt.

“When thinking about household finances it’s essential to factor in the impact if interest rates start creeping back up from their current historic lows and contingency plan in the event we lose our job or if an unforseen health event prevents us from working.

“With mortgages making up 30 per cent of debt for households headed by a person aged 65 or older, it’s also clear we need to ensure Australians are incentivised to save for retirement,” Mr Sainsbury said.

NATSEM Principal Research Fellow, and author of the report, Ben Phillips commented on the burgeoning appetite of Australia’s most leveraged households for even more debt during the past 10 years.

“Debt levels for households with the top 10 per cent of debt are six times higher than their annual income, a 160 percentage point increase since 2004,” Mr Phillips said.

Since 2002, AMP and the National Centre for Social and Economic Modelling have produced a series of reports that open windows on Australian society, the way we live and work and our financial and personal aspirations.

AMP publishes these reports to help the community make informed financial and lifestyle decisions and to contribute to important social and economic policy debate.Curved flare_gradient_rgb.jpg

———-
[1] Households with the top 10 per cent of debt

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Against a backdrop of increasing life expectancy and a proposal to increase the Age Pension to 70 years in 2035, the report: Going the distance – working longer, living healthier, looks at how Australians age through their sixties and whether they will be healthy enough to work longer.

Modelling in the AMP.NATSEM report found:

• Working longer will be a challenge for one in four (25.6%) men and one in five (20.4%) women who are predicted to be in fair or poor health when aged 60-69 in 2035.

• For Australians currently in their forties and in fair or poor health, it’s predicted the majority of men (65.1%) and women (72.1%) will be unemployed when in their sixties.

• Close to half (48%) of Australians currently aged 40-54, who are in very good health, are likely to see a decline to fair or poor health by 2035.

• For those currently aged 65-69 and in good health, 33.1% are likely to be working, compared to only 15.7% if in fair or poor health.

AMP Chief Customer Officer Paul Sainsbury said the report showed health will be an important factor in the later years of working life and our ability to save for retirement.

“The good news is that Australians are living longer. But we know more years in retirement places more strain on our superannuation balances so it’s likely many of us will need to work longer.

“This raises some confronting questions, in particular, how healthy we will be in the later years of our working life and what our financial position will be.

“Rather than simply working longer, we need to re-think our approach to retirement. Reaching a certain age shouldn’t mean we need to leave the workforce entirely. Early years in retirement should be a transition period with reduced levels of work, giving people more time to focus on their interests and wellbeing, while still saving money,” Mr Sainsbury said.

Professor Laurie Brown, of NATSEM, said: “The report shows that Australians in good health are more than twice as likely to be in the workforce compared to those in poor health.

“Currently, the majority of Australians leave the workforce before the age of 65. With the possibility of this increasing to 70 over the next 20 years, younger Australians need to consider the importance of their long-term health and its impact on career, wealth and retirement,” Professor Brown said.

Key findings:

Australians are living longer…

Australia is ranked fourth for men and fifth for women for life expectancy compared to other countries in the OECD. Australian men currently aged 65 can expect to live to 84.8 and women to 87.4.

…But we’re still retiring young

For Australians who have retired in the last five years, the average age of retirement for men is 63.3 years and 59.6 years for women.

The majority of Australians have left the workforce by age 65

Currently, 83% of men and 92% of women older than 65 years are no longer working. This is a significant decline from people aged 60-64, where 40% of men and 60% of women are unemployed.

The health of Australians as they age

More than one in five (23.6%) of men and one in four (24.9%) women who said they were in good health at age 65, were in fair or poor health by the time they reached 70 (data from

2008 to 2013).

Projecting our future health state

By 2035, only one in three (35%) Australian men and 28% of women aged 40-54 are likely to have the same health status when they are in their sixties. For Australians currently aged 40-54 with very good health, it’s likely their health status will decline to fair or poor by 2035 for 49% of men and 47% of women.

Health impacting ability to work

Currently, 72.2% of men aged 60-64 years and 41.5% of men aged 65-69 with very good or excellent health are likely to be in the workforce. If in poor health, this reduces to 34.8% and 22.5%, respectively.

The trend is higher for women, with 55.4% aged 60-64 and 24.7% aged 65-69 with very good or excellent health likely to be working. If in poor health, this reduces to 17.8% and 8.9%, respectively.

Female participation in the workforce is increasing

When looking at gender, female labour force participation in the 60-64 age group has increased significantly – tripling from 12.8% to 45.1% between 1979 and 2014.

International comparison

Australia’s self-assessed health status is ranked fourth in the OECD and similar to that for Switzerland, Sweden and the United States. Canada and New-Zealand are healthier than Australia.

Jobs for older workers

The majority (53%) of workers aged 60-69 are professionals. Manufacturing, electricity and construction sectors employ one in four men aged 60-69. The education and health sectors dominate the employment of women with 49% aged 60-69 working in these industries.

Education and employment

People with tertiary qualifications are more likely to be employed at older ages with 49% of those aged 60-69 years with post school qualifications still employed compared to only 30% whose highest education is year 12.

State by state

The Northern Territory, Western Australia and the Australian Capital Territory have higher labour force participation rates, including for people in their sixties, than in the other states. This may reflect the specific nature of the labour markets in these regions such as the strength of the public sector in the Australian Capital Territory and the strong mining economy in recent years in Western Australia.

About AMP.NATSEM

Since 2002, AMP and the National Centre for Social and Economic Modelling (NATSEM) have produced a series of reports that open windows on Australian society, the way we live and work – and our financial and personal aspirations.

AMP publishes these reports to help the community make informed financial and lifestyle decisions and to contribute to important social and economic policy debate.

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Paul Sainsbury

AMP has announced it will implement a series of measures across its licensee groups that aim to significantly lift the bar on adviser professionalism and reinforce its existing commitment to stand behind the advice it gives to consumers.

AMP Group Executive Advice and Banking Rob Caprioli said AMP, as the largest advice network in Australia, will work with the regulators and lead the way for the industry to help restore confidence and trust in financial advisers and the advice they give.

“This is a critical time for the industry and the measures we’ve announced today go to the heart of what we do – offering financial advice to help people live better lives. This commitment builds on our record of significant investment in the standards of professionalism for our financial advisers,” he said.

The measures are:

• All existing and new advisers must hold a Certified Financial Planner® (CFP), a Fellow Chartered Financial Practitioner (FChFP), or Masters in Financial Planning (MoFP) qualification. New advisers must complete this qualification within five years of joining an AMP licensee while existing advisers have up to 31 December 2019 to do so. These qualifications are post-graduate degree equivalent, making AMP’s minimum requirements the industry’s highest.
• An AMP Customer Advice Review panel will be established by the end of this year to review any customer complaint about the quality of AMP’s personal advice when the customer is not satisfied with AMP’s response through normal channels. If the panel finds the personal advice was not appropriate when it was given, the customer will be restored to the position they would have been in if the appropriate advice had been given. The panel, which will have an independent chair, will have the power to refund advice fees and compensate for losses.
• A broad-ranging ethics and responsible decision-making program for advisers will be developed in conjunction with the St James Ethics Centre with industry input. The program, which will be available to any financial adviser in the industry, will be in place by mid-2015.

“Customers expect us to provide them with quality financial advice that puts their interests first.

So we take this very seriously and will continue to look closely at what we do to ensure we continue to provide the best advice possible,” Mr Caprioli said.

“AMP stands behind the advice its advisers give to customers. That’s the benefit of seeking advice from an adviser backed by a large and trusted brand like AMP. We can make things right for those customers who don’t receive advice that’s in their best interests. The announcement today takes this commitment a step further.”

The AMP Customer Advice Review panel will be chaired by an independent representative and comprise a CFP, FChFP or MoFP advice professional and AMP’s Chief Customer Officer, Paul Sainsbury.

The industry-wide adviser registry, which will be developed by ASIC, has the full support of AMP. When the ASIC adviser registry is finalised, it will be available via AMP’s website.

“Ensuring easily accessible public information on individual advisers, including their qualifications, is an important step to increasing faith in the industry but more importantly it will help Australians seeking advice to more easily compare and select financial advisers,” Mr Caprioli said.

The role ASIC plays in partnering with the industry to ensure high standards and good outcomes for Australians seeking financial advice is critical and AMP strongly supports the FSI Interim Report’s policy option to increase funding to the regulator.

The measures announced today have the support of the Financial Planning Association (FPA) and the Association of Financial Advisers (AFA). The FPA and the AFA have 10,000 and 3,000 members, respectively. AMP is liaising with these groups and calling on the industry to adopt these measures.

Enabling advisers to choose between a CFP, FChFP and MoFP ensures all advisers across the AMP Group have access to the relevant qualifications.

“This builds on the work that our financial planning academy, Horizons, is doing to recruit, educate and develop new financial planners. Horizons entry standards are already among the highest in the industry with a 10 week intensive academy course followed by a nine month
supervised placement in a practice.

“The academy also works with universities to increase awareness of financial planning as a career choice for graduates via the AMP University Challenge,” Mr Caprioli said. AMP is working with its licensees to ensure all AMP financial advisers have the necessary support to achieve the measures outlined today. AMP lifts adviser education standards and launches customer panel / 3AMP’s financial advice network in Australia comprises AMP Financial Planning, Charter Financial Planning, Genesys Wealth Advisers, Hillross, Horizons, ipac and smsf advice.

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