AMP, Suncorp feel the heat as top execs leave

Senior executives are continuing to depart AMP and Suncorp as the two companies show signs of stress.

AMP chief executive Craig Meller. Picture: Hollie Adams

Senior managers and executives are continuing to depart diversified financial groups AMP and Suncorp, as both companies reveal signs of stress as they prepare to open their accounts next week.

For Sydney-based AMP, the departure of two high-level executives in the group’s financial planning arm is the latest sign of problems after a dramatic overhaul of AMP’s financial advice business.

At Suncorp, chief executive Michael Cameron has had to wave goodbye to five of his executives since taking over from Patrick Snowball less than 18 months ago.

The departures come at a testing time for both the ASX 20 corporations.

The $15 billion AMP recently made a dramatic leadership overhaul in the wake of a $1.2 billion writedown following a claims blowout in the life insurance division. Life insurance boss Pauline Blight-Johnson and AMP advice boss Rob Caprioli left the organisation in the overhaul. Mr Caprioli had just finished a two-year overhaul of the advice business.

Last week, Suncorp revealed its interim natural disaster bill had blown out for the fourth time in a row at a time when the $17bn insurer is facing a growing threat from digital disrupters that have flooded the Australian insurance market with cheap policies and nimble operating models.

In AMP’s financial advice arm, Andrew Gregory and Gary Wood are the latest to leave. Mr Gregory was head of financial planning for AMP and its fully-owned but autonomous Hillross Financial Services group. Mr Wood was head of client services at AMP’s fully-owned licensee IPAC, the former independent network founded by Paul Clitheroe.

Both men left to join National Australia Bank’s financial planning arm, which is led by former IPAC boss Tim Steele.

Several sources have told The Australian many IPAC advisers are unhappy with the company’s transition to the new AMP Advice model — the product of Mr Caprioli’s overhaul — which tends to work on a more restrictive approved products list than independent firms.

A recent analysis from Bell Potter showed around 100 advisers had left AMP or one of its banners every six months over the past few years, with total numbers declining 16 per cent since the end of 2014.

Bell Potter analyst Lafitani Sotiriou said the market was unaware of the extent of the issues in AMP’s advice business. He said the NAB appointments were no surprise. “It’s a further endorsement that their (AMP’s) strategy is not working and their advisers are going to peel off,” Mr Sotiriou told The Australian.

“There’s a lot of focus on the life company, but I believe the threat from advisers leaving IPAC is a very real one,” he said.

Sources said the issue was firmly on the radar of under-pressure AMP chief executive Craig Meller. New AMP chairman Catherine Brenner recently said one shareholder had asked for Mr Meller to be sacked.

Activist hedge fund Harris Associates recently became AMP’s biggest shareholder with a 5.3 per cent stake in the group.

After assuming the top job at Suncorp in October 2015, Mr Cameron immediately lost his insurance chief executive, Mark Milliner, to IAG. A shake-up of the leadership and operating model followed, but many other executives have departed the company since the overhaul.

Last April, chief information officer Matt Pancino jumped ship to Commonwealth Bank. In June, banking boss John Nesbitt retired before the age of 60, and was replaced internally by banking chief financial officer David Carter. That same month chief risk and legal officer Anna Lenahan left for CBA, with her roles split in the wake of her exit.

Earlier this month, chief transformation officer Clayton Herbert left after almost two decades with Suncorp, but less than 12 months as head of transformation.

Suncorp recently appointed former Microsoft Australia boss Pip Marlow to the newly created chief of strategic innovation role. “The compliance industry is the one growth area in the industry that you can be assured of,” CLSA analyst Jan van der Schalk said.

Goldman Sachs analyst Ashley Dalziell said Suncorp had a number of tailwinds, but was suffering “particularly weak” mortgage growth in its banking arm over the first half of the year.