Advisers fulfill AMP's financial plan

AMP Financial Planning is probably Australia's biggest dealer group with about 1280 plan-ners. Samantha Walker steps inside the juggernaut to see what makes it tick.

AMP Financial Planning is probably Australia's biggest dealer group with about 1280 plan-ners. Samantha Walker steps inside the juggernaut to see what makes it tick.

If you were to ask the average person in the street to name a financial planning group, most would probably draw a blank. Yet, if you were to then ask them to list financial services groups, odds are that AMP would be right up there among the first responses.

AMP, with its long history, first in life insurance and then in general financial services, is one of the most potent brands in the market. And with major sponsorship status at next year's Sydney Olympic Games, its brand will continue to grow. So, in a time when financial planning groups are striving to find new ways to market themselves, AMP Financial Planning is in a good position to reap the rewards of its name. Managing director Steve Helmich says, though, the group has more than its brand to leverage off.

"We believe our advice and quality of advisers is second to none. Our aim is to be seen as the benchmark of a large dealer group, where our advisers are seen by the public not as life insurance or superannuation advisers, which is somewhat of a proud heritage in some ways, but they're seen as very competent financial planners who can offer a broad range of solutions from a wide range of product manufacturers. Our rationale behind this is AMP is a name the Australian consumer can trust," he says.

AMP Financial Planning's history stretches back to when it was what Helmich describes as a "large whale" of an advisory distribution network, then known as AMP Agency Operations.

Though AMP Agency Operations was "large and successful", by the mid 1990s it was time for a change. In 1995, the year Steve Helmich joined the group, AMP made a radical decision to remodel its distribution channels to more closely align itself with emerging professional financial planning groups.

"The whole aim was to look, feel and run like a dealer group. It wasn't a matter of just changing the shingles on the doors. We introduced higher educational standards and the highest possible level of compliance and vetting. We also established a centralised paraplanning unit," Helmich says.

Educational standards are such that Helmich estimates by the year 2001 50 per cent of all AMP Fi-nancial Planning advisers will hold a CFP accreditation.

As part of its overhaul, some of the old school AMP advisers left the group. "We lost some who couldn't make the transition," Helmich admits.

The restructure, however, has proved a success. With 1280 financial planners now counted among the ranks at AMP Financial Planning, it is one of the largest dealer groups in the country. Accord-ing to Helmich, AMP Financial Planning is responsible for 80 per cent of inflows into its parent group's retail business. What makes this figure remarkable is that AMP Financial Planning is one of four advisory distribution networks tied to AMP. AMP Adviser Services, Hillross and AMP Solu-tions make up the rest of the distribution chain at the group.

"One of the things we're most proud of is that adviser productivity has increased by 130 per cent over the last three years. Our advisers are feeling more confident. They feel they can compete in the market," he says.

Planners working within AMP Financial Planning are divided into three tiers.

Tier one advisers (entry level planners) are required to hold DFP 1 and 2 and can distribute the full range of AMP products, with external products available through AMP's master trust.

Tier two advisers must hold four DFP subjects and be eligible for what Helmich describes as "post vetting status, which means you've shown us you can write good, comprehensive and compliant plans". Tier two advisers have access to a broad range of external products and broader support for training, development and a higher level of research.

The highest tier level at AMP Financial Planning is the Premier Group. The Premier Group are ei-ther certified financial planners (CFPs) or are about to become CFPs.

"These guys get our top support. They get a broader range of products and they get all of our sexy offerings, if I can call them that. When AMP Asset Management get new offerings, we'll always give it to the Premier Group first," Helmich says.

Another value add-on for Premier Group advisers is their presence on AMP's web site, where a brief blurb and contact details for the advisers is included for members of the public who are con-ducting a search of the site. This provides another source of leads for the advisers.

Helmich estimates the number of tier one advisers at around 700, with about 400 tier two advisers and 120 advisers part of the Premier Group.

AMP Financial Planning advisers share a contract-type relationship with their dealer group. Unless an adviser sells his or her client base to the group, when they leave their clients are free to join the adviser at his or her new business.

AMP Financial Planning charge a $550 base dealer group fee, as well as research fees of between $50 to $100 per month. The group may also charge 10 to 30 per cent in dealer cuts. These fees are dependent, of course, on the tier level of the adviser and the access they have to the services of the group.

The group is managed in a hands-on fashion, which is one of its strengths, according to Helmich. There are seven zone managers as well as 51 adviser development managers (ADMs) who actively support the businesses of their advisers. Each ADM works with 25 advisers.

"We actually look at our advisers as being our customers," Helmich says.

Helmich stresses that AMP Financial Planning does not expect its advisers to restrict themselves to selling AMP products. In fact, advisers are encouraged to sell products from external manufactur-ers. However, the group keeps tight reigns on the investments offered by its advisers. Helmich says his group expects strong ethical standards will be maintained, and he says he will not tolerate any "grey areas". All investments placed must come from the recommended list, which includes BT, Colonial First State, MLC, Mercantile Mutual, AC&L and Salomon Smith Barney.

The group extends this tough line to hiring new advisers.

"We select very hard up-front. I encourage our managers to be tough," he says. Despite, or perhaps because of this, the retention rate at AMP Financial Planning is high. The group expects they will have hired 110 planners by the end of the year. “We expect to keep all of them,” Helmich says. He also expects adviser numbers to reach close to 1400 in the next five years, though he says "there'll be no big bangs, no growth of 70 to 80 planners a year".

Inhouse incentives are awarded to those who write the most business each year. AMP Financial Planning measures a planner’s success by awarding ribbons ranging from the Merit level to Blue, Silver and Gold, with the top receiving Diamond level. Each planner who achieves Silver level or above earns a free trip to AMP’s yearly offshore convention. The idea is to have the top 15 per cent going to this convention, though Helmich says this year 20 per cent of planners earned the right to go to Vienna for this year’s conference.

Despite the group having to open its purse strings wider as a result of this, Helmich is nonplussed. After all, too many advisers performing in the higher end of the spectrum is something dealer groups can only dream about, something Helmich knows too well.

“It’s a good problem to have,” he laughs.