AMP punishes past executives, defends vertical integration


AMP Limited has confirmed that a number of former executives and board members have already paid a price for the matters raised in the Royal Commission via the forfeiture of long and short-term incentives.
However, it has defended its vertically integrated structure.
In a response to the Royal Commission released to the Australian Securities Exchange (ASX) today, AMP said the royal commission had been a catalyst for change within the company and that it would be working constructively with government, regulators, advisers and trustees to ensure change in the best interests of customers.
It said AMP embraced the need for change and had already taken significant steps to improve culture, governance and accountability including:
- The appointment of David Murray as an independent chair
- The appointment of Francesco De Ferrari as chief executive
- Board renewal
- The appointment of Alex Wade as Group Executive, Advice
- Acceleration of a coordinated advice remediation program
- Appropriate consequence management including forfeiture of long ad 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.
Commenting on the Royal Commission report, AMP chairman, David Murray said it would be a turning point for the industry.
However, he said: “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,” Murray said.
Recommended for you
A financial advice firm has been penalised $11 million in the Federal Court for providing ‘cookie cutter advice’ to its clients and breaching conflicted remuneration rules.
Insignia Financial has experienced total quarterly net outflows of $1.8 billion as a result of client rebalancing, while its multi-asset flows halved from the prior quarter.
Prime Financial is looking to shed its “sleeping giant” reputation with larger M&A transactions going forward, having agreed to acquire research firm Lincoln Indicators.
An affiliate of Pinnacle Investment Management has expanded its reach with a London office as the fund manager seeks to grow its overseas distribution into the UK and Europe.