Shares in AMP fell hard after the financial services giant reported weaker cash flows from a volatile market.
A short time ago, the shares were down 7% to $5.41.
“Domestic and global investment market conditions continued to be challenging during the first quarter, subduing cash flows across our business,” says CEO Craig Meller.
“Ongoing claims volatility continues to be a feature in Australian wealth protection. Despite these challenges we remain confident in the overall long-term outlook for AMP.”
Australian wealth management net cash flows were $209 million in the first quarter, down 38% from $342 million for the same three months last year.
Total assets under management were down 2% to $112.6 billion, largely reflecting negative investment market movements.
Cash flows were impacted by weaker investor confidence, ongoing market volatility and advisers adjusting to an enhanced regulatory environment.
At AMP’s annual general meeting today, Meller told shareholders sharemarket volatility in second half 2015 has continued into 2016.
“The first quarter cash flows we announced today are subdued as a result, as we have seen right across the industry,” he says.
“As we have consistently flagged, we expected insurance claims experience to be volatile as we work to strengthen and fix our life business.”
Claims were higher than expected in the first quarter of this year.
Meller also touched on the changes to superannuation in the budget.
“We support the government’s intent to define the purpose of the superannuation system, and to ensure the system is fair and equitable for everyone,” he says.
“But given the significance of the proposed changes, we would strongly urge a prolonged period of stability so that Australians’ confidence in saving for retirement through super is not undermined.”
Meller expects that many people will now benefit from professional advice to optimise savings and investments.
“This will be a net positive for our advisers given the detailed nature of the government’s proposals,” he says.