AMP is making a pitch to the non-aligned advisory market with a range of “succession solutions”.
In an email sent to advisers late in August, AMP offered a range of business exit strategies to the wider market including help developing successors “to commencing an equity/capital release strategy”.
“AMP wants to help Advisers with wealth management books with their succession plans – whether it involves purchasing a wealth management book, a graduated succession plan or a contingency plan for unforeseen events,” the email says.
Aaron Klee, AMP head of wealth management acquisition, said with adviser numbers stagnant in an already-aging industry, succession planning was becoming an urgent issue for everyone.
Klee said while AMP had developed a “massive box of lego pieces” around practice and business management – including succession planning – for its in-house advisory force, there was little support for non-aligned advisers in New Zealand.
“We have thought about how to use the tools we’ve built as a QFE to support the rest of the advisory market,” he said.
According to Klee, many NZ non-aligned advisers – of whom a significant number were sole traders – were working past retirement age without a clear exit strategy.
He said while the economics of continuing to practice past the traditional pension age could make sense, business risk also ramped up as advisers get older.
“Continuity planning is essential,” Klee said. “If something were to happen to the adviser in a sole practice, for example, their clients would expect them to have some arrangements in place to look after their interests.”
He said typically advisers have informal agreements with “a friendly advisory firm down the road” rather than written continuity planning documents.
Klee said AMP was hoping to tap into the burgeoning demand for continuity planning and other succession strategies in the non-aligned advisory industry.
However, he said AMP would not be offering advisers old-school ‘buyer-of-last-resort’ – or BOLR – deals.
“BOLRs were too restrictive. They were an old model and not suitable for today,” Klee said. “We see the [continuity planning] agreement now as more like an enduring power of attorney.”
He said there was “no one solution” to adviser succession planning problems but AMP would offer a flexible range of options to the market.
In the adviser email, AMP says those business with “KiwiSaver accounts, investment portfolios or older superannuation schemes” could ease client concerns with formal exit strategies.
“Many advisers may also be wealth protection or risk specialists, but have a small book of savings or investment clients [they want to divest],” the email says. “…if we can assist some Advisers or businesses with a succession outcome along the way, that is a great outcome for Advisers, their clients and AMP.”
Klee said the non-aligned advisory market in NZ was under-served by institutions today.
“There used to be four or five institutions that were supporting independent advisers a while ago but there’s much fewer now,” he said. “We want to be connecting better with that market.”
