Insignia boss Scott Hartley shakes up executive ranks

The door is swinging at the struggling wealth company, with old faces out and back in again in order to better deliver “now and into the future”.

Insignia Financial CEO Scott Hartley has announced a major shake-up of the wealth company’s executive team. Pictures: Arsineh Houspian.

Former AMP executive Scott Hartley has moved to put his stamp on listed wealth company, Insignia Financial, announcing a major shake-up in the company’s executive ranks which includes recruiting former AMP colleagues Renee Howie and Jason Sommer to key roles.

In an announcement on Thursday, a day after denying media speculation that the $1.6bn company had engaged investment bank Citi to look at potential takeover offers, Mr Hartley announced a “major overhaul” of the groups’ operating model.

He said the restructuring and the new executive team, which it says would “drive growth and provide clearer lines of accountability to simplify and streamline the business.”

The new structure, which is aimed at turning around the business which suffered net outflow of some $3bn to $4bn in the financial year just ended, will centre around four dedicated lines of business: asset management, superannuation (Master Trust), wrap platform and advice.

A former AMP executive, Mr Hartley took over as Insignia chief executive on March 1, following the departure of Renato Mota after a 20 year career with the company.

The new leadership team is a mix of existing executives and new external appointments including Renee Howie, who will take over as chief customer officer and AMP’s chief marketing officer, Liz McCarthy, who will take over as chief executive of MLC Expand.

Ms McCarthy, who will start her new job on July 29, will be responsible for the wrap platforms business.

AMP’s former transformation director, Jason Sommer, who left the group in February, will also join Insignia as chief operating officer on July 22 and lead the strategy and enterprise services functions.

The raft of C-suite changes come amid a push to “drive growth and provide clearer lines of accountability”.

Mr Hartley said the company had hired a new chief executive of its superannuation business but will announce details in a few weeks’ time.

Insignia’s share price has halved in the past three years as the retail wealth management sector has faced strong competition from industry super funds and the fallout from the Royal Commission into misconduct in the financial services sector.

Mr Hartley said the business, which was formerly known as IOOF Holdings, had been internally focussed for some time as it sought to consolidate its operations including the MLC wealth business it bought from the National Australia Bank in 2021.

The company this week dismissed media speculation that it had called in investment bank Citi to handle potential takeover offers.

Media reports said Brookfield’s private equity team had opened a file on the group with Citi fielding informal inquiries.

Insignia told the ASX on Tuesday that Citi had not been engaged to field any offers for the company and that it was not aware of any offers.

But observers pointed out that the denial was very specifically worded around whether offers for the company were being fielded.

Citi and investment bank, Gresham, are known as having been long-standing advisers to the company.

In an interview with The Australian, Mr Hartley said the new organisational structure would “drive efficiency and growth” in the company.

“We are moving from a functional structure to one which is focussed on the market segments,” he said.

He said the new operating model would see each line of business led by an executive focused on specific customer segments and competitive landscapes, “allowing for tailored strategies that drive profitable growth and enhance customer satisfaction. “

“This new structure will provide clear lines of accountability, enabling more effective and timely decision-making, to achieve greater efficiency and cost-effectiveness and enhance Insignia Financial’s risk culture and governance,” he said.

He said he believed that Insignia Financial “had the the opportunity to be an industry leader.”

“These changes will support meaningful and sustainable improvement in operational efficiency and earnings growth, enhance economies of scale, and will enable the business to be more competitive.”

The changes will see the departure of several long standing Insignia executives including chief operating and technology officer, Frank Lombardo, the chief distribution officer and head of superannuation, Mark Oliver, and chief client officer, Chris Weldon.

A former AMP executive, Hartley took over as Insignia chief executive on March 1, following the departure of Renato Mota after a 20 year career with the company.

Hartley was chief executive of AMP’s domestic wealth business from January 2021 under chief executive, Alexis George.

The changes at Insignia follow a major restructuring of AMP’s business under the leadership of Ms George, a former senior executive at the ANZ Bank.

One of the top five players in the Australian superannuation business, Insignia is the largest private payer of pensions in the country.

Mr Hartley said the company had already been making some significant changes before he arrived earlier this year.

He said the group still had several significant transformation programs to complete including the simplification of its master trust where four operating platforms needed to be consolidated into two.

“A lot of work has already been done on half of the business but there is still work to do on the master trust business,” Mr Hartley said.

He said the group was hoping to turn around its funds flow from an outflow of between $3 bn and $4 bn last financial year.

He said a big part of last financial year’s fund outflow was because of the migration of the MLC wrap platform to the new Expand wrap platform which he said had seen a number of former MLC platform advisers go to another business.

“There was a bit of a one off outflow associated with that,” he said.

“But we expect that will stabilize and we’ll get back to a growth footing in Wrap pretty quickly.”

Mr Hartley said Insignia was “well placed” to benefit from some of the proposed changes to the laws around financial advisers.

He said he felt the gap between industry super funds and the retail wealth management companies was narrowing with the retail players reducing their fees.

“The industry funds still have the momentum, but we have the opportunity to turn that momentum around and I’m sure we can.”

Insignia’s shares, which rose to $2.50 on the media speculation about a possible suitor earlier in the week, closed down on Thursday by 2.9 cents to $2.29.

Originally published as Insignia boss Scott Hartley shakes up executive ranks