AMP’s SMSF business, SuperConcepts, has recorded an increase in revenue while the wider company posted a 97 per cent slide in its profit for the 2018 calendar year compared to the previous year, driven largely by costs related to advice remediation and the sale of its life insurance business.
The company’s full-year results announcement today revealed SuperConcepts contributed $43 million in revenue to the total wealth management revenue figures, an increase of $6 million on 2017.
According to an investor report released by the company, SuperConcepts provided fund administration, accounting software and education services to 8.6 per cent of the SMSF market, with total assets under administration of $26.7 billion at the end of 2018, up 15 per cent from the previous full year.
AMP itself reported a total net profit of $28 million for 2018, down from the $848 million disclosed in 2017, as well as large-scale outflows from its wealth management division of $3.97 billion, compared to $931 million of inflows in 2017.
Costs related to advice remediation totalled $469 million, while those related to the banking royal commission were $32 million, with losses from AMP’s life insurance business coming in at $176 million.
At the same time, the company’s wealth management operating earnings decreased slightly to $363 million in 2018, from $391 million, driven by higher margin compression from a repricing of MySuper products in the last quarter of 2018 and lower revenues from weaker investment markets.
In regards to AMP’s superannuation business, the company reported that net cash flows out of its retail and corporate superannuation on AMP platforms were $2.52 billion during 2018, compared to net inward flows of $2.4 billion in 2017.
Total adviser numbers fell marginally across AMP’s four financial advice businesses, with 2567 currently listed as working under the AMP Advice, AMP Financial Planning, Charter Financial Planning and Hillross advice groups at the end of 2018, compared to 2692 at the end of 2017.
AMP chief executive Francesco De Ferrari said 2018 was a challenging year for AMP with the royal commission serving as a catalyst for change.
“The sale of our wealth protection and mature businesses to Resolution Life is also a key milestone for the company, exiting the historic business on which AMP was founded. This is a significant shift but a necessary one given the volatility and capital intensity of these businesses,” De Ferrari said.
“The sale of these businesses fundamentally resets AMP, reducing the capital intensity of our portfolio and creating a new, more streamlined and agile group.”