AMP Australia CEO Alex Wade in shock exit, Blair Vernon acting in role

AMP’s woes are not letting up with the head of its large Australian business Alex Wade abruptly exiting the company.

Gone: AMP Australia CEO Alex Wade is leaving the business after less than two years. Picture: John Feder

Embattled AMP has suffered another blow with the head of its large Australian business, Alex Wade exiting with immediate effect, on the back of weak interim earnings and after just 18 months at the wealth group.

The announcement added to AMP’s woes after the corporate regulator signalled it expected to file a Federal Court action against the group by the year’s end and AMP last week flagged a halving of group underlying profit for the six months ended June 30.

AMP was also hit with two class actions in recent weeks, including one from aggrieved financial advisers over a controversial decision to slash the amount the company would pay them for their businesses.

The under-pressure company is due to report interim earnings and provide a strategy update next week.

In a statement on Thursday, AMP said Mr Wade — who ran the wealth and banking operations after they were merged to create a larger Australian division — would “step down from his role, effective immediately”.

No explanation was given in the statement for the departure and Mr Wade was not thanked for his contribution to the company.

“AMP has accepted the resignation and confirms Mr Wade will leave the business,” AMP said.

Mr Wade was appointed to run AMP’s wealth business in December 2018 and joined a month later, before being promoted to run the enlarged Australia division under group chief executive Francesco De Ferrari.

As investors digested another executive change on Thursday, AMP staff were sent an internal memorandum on Mr Wade’s departure and a number of key internal briefings were held, including by Mr De Ferrari.

Sources said AMP’s board and CEO had raised several issues with Mr Wade ahead of this week’s events and some were of the view decisive action was required. The departure of Mr Wade has been linked to alleged conduct and performance issues.

Blair Vernon, AMP’s New Zealand wealth management chief, was on Thursday appointed acting head of AMP Australia while a process is conducted to find a permanent replacement. The latest departure follows AMP selling its life insurance division and a controversial changing of the guard at its capital division.

Tribeca Investment Partners portfolio manager Jun Bei Liu said Mr Wade’s departure may relate to the weaker earnings numbers AMP flagged last week, which she labelled “very poor”.

“It was just weak across the entire business and the extent of it really surprised. They (AMP) certainly need to go through some management changes,” she added. “This business is almost un-investable at this point.

“It’s a deep value play, and it certainly feels likely the business will need to be split up.”

Another market player, who declined to be named, said the sequence of events suggested AMP put Mr Wade’s “head on the stick”, with the poor results acting as a determining factor.

The company last week said it expected underlying profit of between $140m and $150m for the six months to June 30, a drop of more than half from $309m profit at the same time last year.

The earnings update showed AMP’s wealth management arm had trebled its outflows over the past two years to $4.4bn in the first half alone.

The previously flagged loss of corporate mandates, including Australia Post, accounted for $1.3bn of withdrawals, while there were $900m in outflows linked to the early-access superannuation scheme for those affected by COVID-19.

Average assets under management in AMP’s wealth division fell 6 per cent to $126bn in its first half, as the company was hit by market volatility.

Mr De Ferrari said he was pleased to be able to call on Mr Vernon to lead the Australia unit and help drive a turnaround ­strategy.

“We have a strong team in AMP Australia, who have been transforming the business, managing the successful separation of AMP Life, reshaping advice and increasing our focus on clients,” Mr De Ferrari said.

Mr De Ferrari was instrumental in hiring former Credit Suisse colleague Mr Wade to AMP, after both had stints at the Swiss group’s private bank.

Mr Vernon starts in the AMP Australia top job immediately as part of the shake-up, while Jeff Ruscoe replaces him and becomes acting NZ wealth boss.

AMP shares slipped in early trade before rallying 1.4 per cent to close at $1.445 on Thursday. Despite the daily rise the stock remains markedly down on a 52-week high of $2.09.

The exit of Mr Wade comes after AMP has been in the firing line in recent months for promoting Boe Pahari to lead the AMP Capital division, despite the executive being financially penalised over an earlier harassment incident. Mr Pahari — who has been repeatedly backed by Mr De Ferrari — took the AMP Capital reins from Adam Tindall in July.

AMP Capital is the infrastructure and real estate arm, which has been identified as a key part of Mr De Ferrari’s strategic plan for the group, alongside an overhauled wealth division.

Mr De Ferrari will hand down AMP’s interim profit next week, while Mr Pahari will detail plans for the capital unit.

Mr Wade did not respond to requests for comment on Thursday.