AMP strategy, page-15

The strategy is quite comical.

They are going to significantly reduce their adviser numbers... The only reason AMP products get sold is due to their advisers. $3.1bn net outflows even with a vertically integrated business model and 2,500 advisers, doesn't paint a pretty picture for when advisers numbers are significantly less.

If they want their products to be competitive, they need to be cheaper. AWM margins being squeezed as clients are moved to more 'modern' products from legacy products. Why were these legacy products being maintained in the first place? Grandfathered commissions. This is a very important point as these legacy products are massive margin (due to unjustifiable high costs) yet advisers dont move clients out of them as they can keep clients in them and get paid without servicing them due to grandfathering... this is now officially coming to an end 2021 so expect more transition to lower margin North etc. AWM profit has already halved.

North itself is having margins squeezed. It does nothing better than competitors and it isn't cheaper. Any gross margin will be eroded if they need to reduce fees further to keep up (which they need to if they don't have a plethora of advisers recommending it due to being aligned).

AMP Capital is a good business but less aligned advisers, reduced fund flows. Markets are just about all at all time highs, be interesting to see how they go in a downturn. This has done well though, good on them.

CEO targets being revised down is a massive laugh. If they couldn't see this all coming and set the incentives incorrectly, whos fault is that? A mere mug like me could see all this coming without being in the ''engine room" of the business. The royal commission outcome was about as good as it could get for AMP with vertical integration not being banned.... They have been fortunate, not unlucky!