AMP dissolves wealth management unit, CFO retires after AMP Capital sale

AMP will dissolve its Australian wealth management unit structure by the end of the year, reflecting its smaller size and ‘simpler’ business mix.

AMP will dissolve its Australian wealth management unit structure by the end of the year, reflecting its smaller size and “simpler” business mix after selling the bulk of its asset management business.

The unit’s boss since 2021, Scott Hartley, will leave the company after a six-month transition period, AMP said on Monday.

Chief financial officer Peter Fredricson, who joined the 174-year-old group in January, will retire from executive life following a 40-year career and will also leave the group.

The role of Blair Vernon, who heads AMP’s New Zealand unit and is also head of transformation, will be expanded, and he will also be appointed CFO from July 3.

“Following the AMP Capital sales we are a much simpler business, and we need to reflect that in our leadership team and structure,” AMP chief executive Alexis George said.

“Scott will be working with us as we adapt the organisational structure for wealth management over the coming months, and I wish him all the best for his future career.”

AMP will no longer report the wealth management arm as a segment, but will continue to report its three business lines: platforms, master trusts and advice, separately. The reporting of AMP bank and New Zealand wealth management will not change.

The company said its decision to dissolve the wealth management unit also reflected the “progress made in positioning the platforms business for growth and achieving stability and efficiency in the advice and master trust businesses”.

In April, AMP said outflows in its wealth management business had slowed during the first quarter of fiscal 2023 to $606m, while assets under management in the unit had grown by more than $2bn. That followed its annual net profit falling below expectations in February, which triggered a hefty sell-off in its shares.

AMP has sold most of its previous asset management business, AMP Capital, in the past few years, including its global equities and fixed income business to Macquarie, its infrastructure debt platform to Ares Holdings, and the international infrastructure equity business to DigitalBridge.

A proposed sale of its domestic real estate and infrastructure equity businesses to Dexus Funds Management is pending regulatory approval in China.

Ms George said the appointment of Mr Vernon, who joined AMP in 2009, as CFO would ensure a “seamless transition.

“He is uniquely well-placed to take on the combined role of AMP CFO along with his existing role of transformation, having played a major role in the simplification of the business,” she said.

“Blair has a strong track record of prudent financial management, delivering sustainable cost reduction, which together with his knowledge of the company will enable him to continue to drive the efficiency agenda.

“A key focus for Blair will be delivering the capital management and cost base review.”

That review is looking for ways to cut costs, and will cover options for any excess liquidity, including returning it to shareholders or reducing outstanding debt.

AMP shares rose 1.1 per cent to $1.08 on Monday.