AMP has acknowledged the conflict of interest in financial services highlighted by Kenneth Hayne’s final royal commission report, but says there are still benefits to its business model.
AMP, which has lost more than half its market value since its misconduct was made public by the inquiry, said on Tuesday the royal commission had already been a catalyst for change.
Chairman David Murray, who last year replaced Catherine Brenner in one of those changes, said AMP’s advice model offered benefits to consumers despite Commissioner Hayne’s reservations about vertically integrated financial services.
Commissioner Hayne’s recommendations include advisers disclosing any lack of independence to clients, the ending of grandfathered commissions, and an end to the hawking of superannuation products.
‘AMP notes that the benefits of vertical integration remain available for customers while acknowledging that conflicts of interest need to be more effectively managed,’ Mr Murray said in a statement.
‘The proposed regulatory changes will require serious and determined effort to implement but, with the support of industry, should deliver better outcomes for customers.’
Australia’s largest wealth manager listed a raft of changes already implemented from the royal commission, including the appointment of Mr Murray – the former Commonwealth Bank chief executive who also led the 2014 inquiry into the financial services sector.
AMP faces possible criminal prosecution for misleading ASIC over fees for no service after thousands of dead superannuation customers were charged for life insurance.
Their market value fell by more than $2 billion after the revelations were made public, with shares in the company tumbling 30 per cent from about $5.50 in March last year down to $3.83 at the start of June.
In January, the wealth manager flagged a 96 per cent drop in full-year profit after confirmation they would set aside another $200 million to cover the cost of customer remediation following the royal commission.
At 1044 AEDT AMP stocks had risen 18 cents, or 8.14 per cent to $2.39.
The company said on Tuesday it was on track to improving culture, governance and accountability under chief executive Francesco De Ferrari, the permanent successor to the departed Craig Meller.
‘There is more work to do as we are determined to earn back the trust of our clients, our shareholders, our regulators and the wider Australian community,’ AMP said in a statement.