Financial services giant AMP has posted a 3% fall in net profit to $382 million for the six months to June 30.
However, underlying profit was up 16% to $510 million with double digit growth in operating earnings for all contemporary businesses.
AMP declared an interim dividend of 12.5 cents per share compared with 11.5 cents per share for the 2013 interim dividend.
CEO Craig Meller called it a solid result, saying AMP has made good progress to be a leaner, more efficient and increasingly customer-driven organisation.
“We are continuing to transform our core Australian business with a market leading mobile platform launched and a new operating model in place to focus on the customer and to drive sustained growth as the Australian wealth industry doubles in size by 2022,” he says.
“It is particularly pleasing to see AMP’s offshore strategy already delivering good cashflows while building strong growth potential in the long term from partnerships with national champions in China and Japan.
“The wealth protection business is stabilising, with the improvement plan delivering encouraging results, however, we have more work to do.”
In wealth management, operating earnings were up 16%, reflecting increased investment related income from higher customer account balances, a strong rebound in net cashflows and good cost control in a growing business.
In wealth protection, operating earnings were $91 million compared with $64 million half on half, reflecting the impact of management actions. The volatile environment, claims and lapse experience were broadly in line with best estimate assumptions.
The AMP Bank delivered $42 million operating earnings, up 11%, reflecting an increase in residential mortgages with AMP aligned advisers contributing almost a quarter of new business in a period of intense competition.
AMP’s adviser network remains the largest adviser network in Australia with 3,860 financial advisers, up 2%.
AMP says has a series of measures to significantly lift the bar on adviser professionalism and reinforce its existing commitment to stand behind the advice it gives to consumers.
Rob Caprioli, Group Executive Advice and Banking, says AMP, as the largest advice network in Australia, will work with the regulators help restore confidence and trust in financial advisers and the advice they give.
“This is a critical time for the industry and the measures we’ve announced today go to the heart of what we do – offering financial advice to help people live better lives,” he say.
All existing and new advisers must hold a Certified Financial Planner (CFP), a Fellow Chartered Financial Practitioner (FChFP), or Masters in Financial Planning (MoFP) qualification.
New advisers must complete this qualification within five years of joining an AMP licensee while existing advisers have up to the end of 2019.
An AMP Customer Advice Review panel will be established by the end of this year to review any customer complaint about the quality of AMP’s personal advice when the customer is not satisfied with AMP’s response through normal channels.
If the panel finds the personal advice was not appropriate when it was given, the customer will be restored to the position they would have been in if the appropriate advice had been given. The panel, which will have an independent chair, will have the power to refund advice fees and compensate for losses.
A broad-ranging ethics and responsible decision-making program for advisers will be developed in conjunction with the St James Ethics Centre with industry input. The program, which will be available to any financial adviser in the industry, will be in place by mid-2015.
AMP is working with its licensees to ensure all AMP financial advisers have the necessary support to achieve the measures outlined today.
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