New AMP chief Alexis George not shying away from tough task

New AMP CEO Alexis George wants to resuscitate the 172-year-old group’s brand, develop cheaper financial advice models and target growth in areas including the bank.

New AMP CEO Alexis George: ‘For me, getting the demerger finalised is probably one of the biggest priorities.’ Picture: John Feder

New AMP chief executive Alexis George will use her early months in the job attempting to resuscitate the 172-year-old group’s brand, developing cheaper financial advice models and targeting growth in the bank and platforms.

Ms George, who takes on one of the toughest CEO roles on the ASX on Monday, labelled it her last executive role and said she wasn’t shying away from the task of turning the beleaguered wealth group’s fortunes around.

She says breaking up the remaining divisions of AMP and selling them off isn’t part of her strategy, even as AMP works to spin off its marquee private markets unit onto the ASX in the first half of 2022.

Ms George – who was appointed to the role in April – takes the AMP reins after serving as former ANZ deputy CEO. Her arrival comes as AMP plots the demerger of its private markets division – which houses infrastructure and real estate investments – a process Ms George lists as among her near-term priorities.

“For me, getting the demerger finalised is probably one of the biggest priorities. The second thing for me is just rebuilding faith in the brand,” she said in an interview. “Not just for the customers and the shareholders, but also for our people.

“We’re going to be a different organisation once the demerger has occurred and we’re no longer a top 20 company or even a top 100 company … We have to continue on this simplification journey and that’s not just about costs, it’s processes, governance.”

Part of Ms George’s plan is instilling the right culture at AMP and tackling any problems head on, given the company has been entangled in scandals and controversy for more than a decade. Lately, the issues have emanated from poor conduct fleshed out at the Hayne royal commission, and last year the fallout from a sexual harassment incident that claimed the then chairman David Murray.

“I’ve spent a lot of time thinking and living the culture at ANZ, and I really want us at AMP to have a really purpose-led and inclusive, diverse culture and I think that’s really important for me to make sure we have that space for people to feel safe at work,” Ms George said. She noted AMP had started a process of cultural change.

“I’m not naive going into this role, I know there is going to be a lot of hard work. It’s also likely to be my last executive role and I’d rather leave on a positive note. I’m really convinced that we can do better at AMP and that we can make this something to be proud of.”

But investors and analysts will want tangible results at AMP, after former CEO Francesco De Ferrari’s turnaround plan met with mixed results.

Net cash outflows from the wealth division amounted to $1.5bn in the first three months of 2021, including $448m in regulator pension payments, compared to $1.7bn in the same period last year.

“There have been outflows and I think that’s something personally I want to focus on, because that to me comes back to the brand and making sure people have faith in the brand,” Ms George said.

Mr De Ferrari’s plan still has a year to run, but Ms George noted that it made sense for her to reset the AMP strategy to coincide with the private markets spin-off in the first half of next year.

“I think that makes sense to do that because then we can kind of reset both organisations,” she added.

AMP last week announced an overhaul of its financial advice business, including raising fees to practices and ending the controversial buyer of last resort program for planner businesses.

Ms George highlights embracing digital channels, technology and data as part of her blueprint for the advice unit, as well as finding a way to make advice more affordable.

“Advice is very important. We do have a complex system in Australian and I think it’s really important. But clearly we have to do it cheaper, because most Australians won’t pay the money that it costs at the moment,” she said, noting meaningful changes at AMP’s wealth unit would take two to three years.

Improving performance in the superannuation business is also a focus and Ms George points to “growth opportunities” in the platform business, where investments can be housed and centrally managed.

The AMP bank – which has a $20.8bn loan book – is also an area that called out as an opportunity if the group can better tap into healthy growth in the lending market.

“A lot of people don’t know that AMP has a bank. I think there’s real scope for growth there,” Ms George said.

“We need to do a bit of work around the digital side, but I’m really optimistic about what we can do.”

AMP is also working through a number of potential class actions and lingering regulatory issues.

The corporate regulator on Friday lodged civil legal action against AMP, alleging the financial services group charged fees for no service to large numbers of superannuation customers.

AMP – which avoided criminal action over the issue – said it had repaid about 2500 customers linked to the problem.

More broadly, Mr De Ferrari has previously said AMP was on track to complete its $778m customer compensation program by the year’s end. AMP reports first-half earnings on August 12.