Active discussion on sale of AMP NZ under way

AMP is in active discussion about the sale of its New Zealand business.

Friday, July 27th 2018, 1:41PM

It today provided an update on its expected 2018 interim results and announced action being taken to reset the business after the fallout from revelations of misconduct, uncovered by the Australian Royal Commission of Inquiry.

It said it was accelerating “advice remediation”, offering fee reductions on its Australian MySuper products, and investing to strengthen risk management systems and controls.

It is also reprioritising the “portfolio review” that could see AMP in New Zealand sold off.

AMP wants to release further value from several business lines, including AMP on this side of the Tasman.

It said it was in active discussions with a number of interested parties, though no timeline could be given for a transaction.

The business was more stable, so it was appropriate to pursue the transaction, a spokeswoman said.

AMP’s first-half underlying profit is expected to be lower than previously indicated, in the range of A$490 million to A$500m.

It will include a provision of A$290m for potential advice remediation. AMP was found to have misled regulators multiple times and charged fees when clients did not receive an advice service.

Acting chief executive Mike Wilkins said: “Today’s announcement reflects our commitment to take decisive action to reset AMP and establish a platform from which the business can recover rapidly. We’re facing squarely into the issues that have impacted our reputation and the community’s confidence in AMP.

“Our remediation provision responds to industry-wide issues raised by ASIC in its reports 499 and 515 and reflects a conscious business response to increased community expectations. This remediation programme is complex as it will address both employed and aligned advisers, and we understand it is one of the first programmes to do so. We are working on the programme with our advisers, the vast majority of whom are dedicated, professional and committed to meeting the advice needs of their clients.

“Customer needs are our immediate priority as we firmly believe this will also best serve the long-term interests of shareholders. We know it will take time to earn back trust, however today is an important milestone in that process.”

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