Australian wealth manager AMP to revamp its financial advisory model

July 26 (Reuters) – Australia’s AMP Ltd (AMP.AX) on Monday announced it would switch to a new form of financial advisory model for clients, marking a shift in the ailing wealth manager’s advisory operations as it embarks on a split of its infrastructure and real estate units.

The move comes after AMP decided in April to separate from the private markets business of its asset management arm and focus on its wealth management units following the failure of the US offer from Ares Management Corp (ARES.N) to buy the whole company.

As part of the new model, AMP will introduce a new service and fee structure for its customers and cease to have customer relationships. Instead, it will release “institutional ownership of AMP Financial Planning to advisers,” he said.

AMP will also enter into deals allowing it to repurchase clients’ books from licensed financial planners from the end of this year, after the securities regulator began investigating an alleged no-cost conduct of service through its financial planning unit.

“The new model frees up institutional ownership. Buyout agreements will also cease, with advisers having to make the decision to exit the network by year-end under their existing agreements,” said Matt Lawler, director General Advice at AMP.

The struggling asset manager will gradually roll out a new “service proposal and fee model for advisory practices” for his clients between January 2022 and January 2023, he said.

Sameer Manekar report in Bengaluru; Editing by Subhranshu Sahu

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