AMP has signaled the release of a new direct platform-like option in partnership with BlackRock for NZ investors in a group strategy document published last week.
According to the AMP strategic plan, the group’s NZ wealth management arm will roll out a “digital unit trust product leveraging investment in automation and [the] BlackRock partnership” during the first six months of 2022.
The AMP NZ wealth business transferred about $9.6 billion to BlackRock during the September quarter as part of deal to shift most of its KiwiSaver and other superannuation assets to passive management. Previously, AMP, which has about $12 billion under management overall, outsourced the KiwiSaver and other funds investment duties to sister firm AMP Capital NZ.
While details of the mooted ‘digital unit trust’ remain scarce, an AMP NZ spokesperson confirmed the product would appear “in the first half of next year”.
“Clients will have access to a number of funds and be able to open and manage their investment through a contemporary digital interface,” the spokesperson said.
The AMP NZ stabilisation plan also hinges on pushing ahead with “sustainable investments”, controlling costs, expanding “digital distribution” in general insurance and looking to “defend market share and leverage new lower cost investment offer”, the document says.
Like much of the broader ASX-listed financial services firm, the AMP NZ wealth business has been under pressure to transform after a torrid couple of years.
And, according to the strategic plan, the NZ business has already delivered on some changes in addition to the BlackRock deal including a 30 per cent cut in full-time customer service employees, locking-in a five-year general insurance partnership agreement with Vero and re-engineering its distribution model.
AMP NZ has “repositioned distribution to be predominantly direct to market via employed advisers (AMP and AdviceFirst) and fully exited aligned advice”.
The document says about two-thirds of AMP NZ assets under management is sourced through its 37 AdviceFirst and 26 home-brand employed advisers with the remainder flowing from distribution agreements with 206 independent financial advisers.
Meanwhile, the wider AMP business proceeds apace in break-up plans for AMP Capital that will see the funds management arm split into a to-be-listed separate private markets division and the remaining public assets unit (global equities and fixed income – GEFI) sold to Macquarie next year.
Recently installed AMP chief, Alexis George, said in a release last week that the “separation and demerger” of the private markets unit “will enable [AMP and PrivateMarketsCo] to accelerate their growth strategies, as well as simplify and improve efficiency”.
The GEFI sale is due for completion in the first quarter of next year with most AMP Capital NZ staff expected to transfer to Macquarie.
George said AMP had “rapidly transformed over the past three years”.
“We are no longer a life insurer. In wealth management we have shifted from a vertically integrated proposition to a contemporary, customer-led service provider,” she said.
George also said the once adviser-reliant financial services giant was looking past third-party intermediaries for future growth.
“We also believe we can further scale our business by taking our products direct to clients,” she said.
AMP closed at about A$0.94 cents last Friday, down more than 5 per cent for the week.