AMP Wealth Management Strategy a ‘Return to the Dark Ages’

Synchron Chair, Michael Harrison, says AMP’s new strategy for wealth management, is a ‘return to the dark ages’, where institutions make and create product and force people into them, with respect to what an individual actually needs given little thought.

Synchron Chair, Michael Harrison …AMP strategy heralds return to the dark ages

“The AMP announcements are very bad news,” said Harrison, “And it’s a state of affairs that has been largely brought about by oppressive, anti-adviser government reforms.”

He argued that although the Royal Commission identified that the core of the problems in the wealth management industry lies with banks and institutions, the sanctions introduced before and afterwards mean advisers suffer consequences and bear a growing burden of obligations.

“To make matters worse, governments, and institutions with big budgets, appear to have also somehow manipulated the rhetoric to such an extent that many people seem to genuinely believe advisers have brought the current set of circumstances on themselves and have no empathy for them,” continued Harrison.

He noted that there was little to indicate during the Royal Commission that most advisers were doing the wrong thing, but a great deal of evidence that institutions, including AMP, did a great deal wrong.

“What many people have failed to understand is that AMP and the institutions were largely responsible for the fees-for-no-service debacle, not advisers.”

“What many people have failed to understand is that AMP and the institutions were largely responsible for the fees-for-no-service debacle, not advisers,” he said.

“For example, when AMP bought back books of clients from exiting advisers that it couldn’t immediately on-sell to other AMP advisers, it went on raking in fees from those clients without organising any service. That is nobody’s fault but AMP’s and yet, somehow, most unfairly, the fees-for-no-service issue has still been perceived as poor adviser behaviour. In the simplest of terms, it is wrong to make AMP advisers suffer for AMP’s sins.”

Harrison said that while AMP has refused to be drawn on exactly how many advisers will be forced to exit the industry following the rationalisation of its adviser network, the estimates range from 30 percent to as many as 80 percent of its adviser network.

“How does the exit of advisers – who are legally required to work in the best interests of their clients – in favour of direct channels, improve outcomes for consumers? It’s clear that all this will do is push people into products. Is that, sincerely, what the Government wants?” he asked, adding the Government has mismanaged the financial services industry to such an extent that it has effectively handed institutions like AMP a free pass.

“The fundamental question governments and institutions need to ask themselves now is, how are consumers better off without advice?”

  • Jeremy Wright

    Michael is correct and what has been allowed to occur, with the blame redirected to advisers who had nothing to do with the vast majority of the Royal Commission findings and the resulting fiasco we live with today, is a national disgrace.

    It is a systemic failure in that top management in the largest Institutions, are out of their depth and continue to act in a REACTIVE manner to events, instead of PRO-ACTIVELY looking at potential and current issues, find the solutions and get on with fixing them, so the sort of easily avoidable problems, do not continue to haunt the Industry.

    As usual, the Lawyers and Compliance and Education Industries, continue to proliferate at a rapid rate, at the expense of every one else.

    WHY?

    Because these three occupations do not create revenue for Businesses trying to survive.

    In fact, they do the exact opposite.

    They create road blocks and drain revenues from Businesses and the Government, while promoting altruistic intentions.

    The down fall of many thousands of great Businesses, lies directly with these three entities.

    The stated intentions of the Government to improve outcomes for all Australians, has failed and will continue to fail, because they are listening to the very entities who have never contributed to the economy, based on real world experience.

    Economies and the well being of society, can only run effectively, if properly set out regulations that improve outcomes are enacted.

    What has occurred is the exact opposite.

  • Life is short

    Who said LIFE was fair? Not the AMP and not the major banks. Yet the bureaucracy grinds the real service providers like us into the ground whilst, as Michael says, giving the likes of the AMP a fresh ‘free pass’. The self-glorification of ASIC and the Federal Government’s moronic FS ministers [over the years] have destroyed our industry. If I was a conspiracy advocate, I’d be thinking just how deep did it go – kill off ‘independent George’ and hand back the ‘keys to the kingdom’ to to those that were the reason for this whole debacle occurring. P.S. apologies for using the word ‘independent’ – I’ve used a pseudonym to avoid any potential backlash from ASIC, they’ve got nothing better to do than beat us into submission.