AMP NZ has flagged the launch of new funds and retention strategies targeting “higher value” KiwiSaver members as part of its growth strategy this year.
According to investor information released with the AMP 2024 annual results last week, the NZ arm plans to increase “personal contact” with its higher-balance KiwiSaver members in 2025 “to reduce cash outflows”.
The AMP scheme has suffered persistent attrition over the previous decade or so with membership numbers dropping from almost 260,000 at the end of March 2014 to about 145,000 10 years later.
During the 2024 calendar year, the AMP KiwiSaver scheme saw net cash inflows of A$95 million compared to A$144 million in 2023, the annual report data shows, while investment returns of A$628 million boosted assets under management to more than A$6.5 billion: however, its market share fell during the 12-month period to 5.8 per cent from 6.1 per cent.
In addition to plugging up high-balance member leaks, AMP has also slated a marketing push this year in “recognition of investment performance”.
The AMP KiwiSaver diversified funds ended last year either first or second for quarterly returns in all of the risk categories covered by the Melville Jessup Weaver (MJW) investment survey.
Despite the short-term turnaround, the AMP funds – mostly outsourced to passive BlackRock strategies – still lag the median over the five- and 10-year periods in the MJW report.
But aside from shoring-up its KiwiSaver scheme, AMP NZ plans to launch “new product and funds offers” this year, the corporate release says, to bolster assets under management.
The NZ business reported net outflows of A$105 million from its non-KiwiSaver superannuation and investment products last year, offset by returns of A$321 million to end the year on $5.2 billion.
Asset-based revenue remains the big-ticket item in the AMP NZ accounts, pulling in A$91 million in 2024 while its advisory brands (AdviceFirst and Enableme) added some A$48 million in gross revenue.
Total AMP NZ income rose 3 per cent year-on-year while net profit after tax was up 8.8 per cent to A$37 million (2023: A$34 million).
However, wealth management profit of A$18 million dropped more than 18 per cent over the 12-month period while the advice contribution jumped almost 60 per cent from A$12 million in 2023 to A$19 million in the latest results.
AMP bought the Enableme business in 2023, merging it with AdviceFirst. The group aims to “leverage” the Enableme network this year as part of a “differentiated employee benefits” offer, the strategy document says, while piloting a retirement advice service.
NZ contributed about 25 per cent of the total net profit after tax of A$150 million reported by the wider ASX-listed business last year.
Overall, AMP profits slumped by A$115 million year-on-year following a “business simplification spend and the loss on sale” of the advice division.
The 2023 profit result also includes the proceeds from the sale of funds management business, AMP Capital, in parts to various buyers.
AMP booked a loss of A$36 million after offloading its advisory businesses and equity stakes in advice practices in a deal completed at the end of last year.
Under the arrangement, the ASX-listed company retains 30 per cent of a new joint venture – dubbed Mutual Advice Partners – along with Entireti and AZ Next Generation Advisory (AZ NGA) that holds the four former AMP advice brands: Charter, Hillross, AMP Financial Planning and Jigsaw.
AZ NGA acquired the AMP shares of 16 financial advice practices.
Despite undergoing an Ozempic-level fat-trimming exercise over the last few years – shedding funds management, insurance and advice to leave a new-look structure comprising a small bank, an Australian platform and superannuation fund operation and the NZ wealth arm – a couple of legacy issues still dog AMP.
The group is facing three legal proceedings over various historic advice, superannuation and insurance alleged mishaps with the first – a super class action – to air in an eight-week court trial set down for a May 26 kick-off.
In a statement, AMP chief, Alexis George, said: “Having successfully completed the advice transaction in December 2024, AMP is positioned to drive growth and build on opportunities in our wealth businesses to become a pre-eminent retirement specialist, and as a leading digital bank.”
The AMP share price dropped sharply on the annual report release, falling more than 14 per cent to close at A$1.50ish last Friday: over the previous 12 months the price has ranged from A$1 to almost A$1.80.