Australian financial services giant AMP today unveiled its latest strategic vision for pushing its b...
Australian financial services giant AMP today unveiled its latest strategic vision for pushing its business forward worldwide, including changes to the way it does business in the UK in response to the reviews and regulatory moves being proposed, such as CP121.
Managing director Tom Fraser has identified costs and distribution as key issues that need to be handled in the face of industry consolidation, changes to the market, and the pattern of life companies buying distribution.
Looking ahead, Fraser said there would be further consolidations, fewer IFAs, a rise in the importance of branding, growth in bancassurance, more pressure on margins and the need to deal with a possible referendum on the euro.
Discussing the possible removal of the 90/10 principle, Fraser said this would be in the interest of Amp in the medium term as it would provide a more level playing field, but would likely cause increased transparency with the resultant pressure on business margins.
In terms of distribution, there is likely to be a move towards more trail commission in response to pressure to reduce up front commission, while solvency pressures on life companies will require the development of more "smart" products to help reduce costs.
AMP also sees a continued shift from DB to DC schemes, which will open up "huge potential" in terms of funds under management in DC schemes, while an increase in demand for advisory services will be responded to by "growing Towry Law".
Significant costs have been stripped out of Amp's UK business in the first six months of the year, and says it will save more by continuing with a multi-distribution model.
To promote 'long-term investment'
Switching 'hard and expensive'
Smaller funds still packing a punch
To drive progress