Advice to shift focus: AMP

AMP expects the focus of financial advice to shift as a result of the proposed changes to superannuation announced in this year’s Federal Budget, but has rejected suggestions that the importance of financial planning will be diminished.

Government initiatives to reduce the complexity of superannuation would allow planners to provide long-term strategic advice instead of concentrating on minimising post retirement taxes and maximising government benefits, AMP chief executive officer Andrew Mohl said at the company’s annual general meeting yesterday.

Mohl said planners were “the financial equivalent of personal trainers” and helped clients have the discipline to manager their debt, insure their risks and grow their long-term savings.

“Their job is to work with individual clients to understand what they want to do with their lives and help them develop a financial roadmap to achieve these goals. That role has, if anything, been enhanced by the reform proposals announced by the Government last week.”

Mohl said AMP’s financial planning network, amongst the largest in Australia, was a “critical competitive advantage” for the group.

“This business has taken many decades to build and grow. By definition, it is therefore difficult for any competitor to replicate quickly,” he said.

Last August, the company announced an aggressive aim to double the value of the business by mid-August 2010.

AMP chairman Peter Mason said, based on external measures, its value had increased by 26 per cent since August 2005, but it would have to sustain average annual growth of around 15 per cent to achieve its target.

Mohl said to reach the target AMP would capitalise upon its position in the retail superannuation market.

“We already hold a market-leading 17 per cent share, and we intend to maintain our growth here by helping our planners lift their productivity and lower their costs to serve,” he said.

Recent analysis by PortfolioConstruction Forum using Plan for Life data showed AMP had the largest funds under management of platforms that continued to grow at above average rates between December 2004 and December 2005.

Mohl said the group also had the largest market share in corporate superannuation, ranked second in the retirement income product market, and had the third largest slice of the individual risk market.