The move no other big super fund has dared to try

Could this attempt at changing the company’s image help turn around what was once a powerhouse of wealth management?

AMP, once one of the biggest names in Australian finance, has been in rebuilding mode for years, after it was pummelled by the 2018 royal commission into financial misconduct. The probe exposed deep-seated problems in the superannuation and wealth management industries, but was particularly devastating for AMP, sparking a share price collapse, an exodus of executives and a major upheaval of its business during which it sold off a string of assets.

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In the words of former chair Debra Hazelton, the effect of the probe was “almost existential” for AMP. The share price is down about 30 per cent over five years.

Lately, however, things have calmed down somewhat. The latest quarterly update in April showed cashflows were up on its platform business, North, while the outflows from its superannuation arm have fallen, and growth in its bank’s loan book was flat.

George, a former ANZ Bank executive who has been CEO of AMP since 2021, says the company is largely done in selling off assets, aside from an investment in the US that it wants to exit, and the company has been focusing on “what is the AMP into the future”.

“I have to accept we’re smaller, but with that, we can be a bit more agile,” she says.

A key focus for the company is also on its brand, and on this front, George says there are changes afoot. While AMP’s brand was trashed by the royal commission, she says figures from RepTrak show its reputation last year was its best in seven years.

Importantly, there are signs its reputation still has room for improvement. At the company’s annual meeting this year, chairman Mike Hirst faced a question over how the company compared its reputation against scandal-hit companies, including Qantas and Rio Tinto, when setting executive bonuses. He replied it made sense to use companies “that are around the mark where we are in terms of reputation”.

George acknowledges it still has more work to do, but argues the improvement allows the company to move from “quite conservative” in its brand to “a bit more out there”.

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The crypto foray is one example of this, another is the TikTok videos churned out by its economists Shane Oliver, Diana Mousina and My Bui on financial issues.

Another example is AMP Bank launching the country’s first 10-year interest-only home loan in May. Critics said the long interest-only period was risky, while AMP said it allowed for more flexibility, including retirees wanting to boost their cashflow.

Are these types of moves working?

Morningstar analyst Shaun Ler says AMP’s attempt to position itself as a “challenger” that is more nimble is likely a response to the fact that many people may associate AMP’s brand with the misconduct exposed at the royal commission.

“I think at the heart of it they are trying to rebrand themselves,” Ler says. “I certainly think that it’s a sensible thing to do.”

The rebranding push could also reflect the fact all money managers are trying to appeal to younger generations who stand to inherit large sums in coming decades.

As to whether the changes are helping, Ler says the latest update from AMP showed some improvement in flows, though it “still has much to do”.

Jun Bei Liu, portfolio manager at Ten Cap, says AMP’s North platform has been a successful challenger, but it’s a harder slog for its bank. She adds that changing a corporate reputation takes time, and suggests it could be difficult to bring about major change in a company as old as AMP. “My experience with lots of companies like that is in general, it’s very hard to change,” she says.

As well as trying to be a “challenger,” another top priority for George is to focus on more familiar territory for AMP: retirement products.

George says that although the super sector has been “amazing” at helping people accumulate assets, it hasn’t focused enough on the next phase of helping retirees spend their savings. AMP has launched various products aimed at this market.

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On the government’s plan to raise taxes on superannuation balances over $3 million, George says AMP has no problem with some sort of cap on the tax concessions in super. However, like many others in the industry, she and AMP have been critical of the fact that Labor’s policy isn’t indexed for inflation, and that it applies to unrealised capital gains, saying “complexity that doesn’t seem to be necessary”.

“We don’t have a problem with the cap in terms of tax concessions around super,” she says.

“I think that sounds fair and reasonable, but to not index them and to apply it to unrealised gains just seems to add a complexity that doesn’t seem to be necessary.”

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