Wealth management company, AMP Limited (ASX: AMP) recently held its Annual General Meeting in which the company’s chairman informed about the scrutiny that the group had faced from regulators, politicians, media and the community.
According to the company’s chairman the Royal Commission provided three key lessons for the company’s business. Firstly, the business was too slow to identify customer issues and take appropriate action, therefore it is important for the company to put things right for customers. The company’s current objective is to identify and remediate, as quickly as possible, customers who received inappropriate advice, or paid fees where there was no evidence a service was provided.
By building the necessary infrastructure and systems, the group is trying to compensate all affected customers within the estimated costs and planned, but challenging, three-year timeframe.
Secondly, in hindsight, investment in monitoring and systems was not adequate for the complexity of the business which is why currently the priority of the company is to strengthen risk management, controls and governance.
The group’s investment of A$100 million (pre-tax) over two years has already funded a number of initiatives to strengthen practices on governance, culture and accountability.
Thirdly, accountability and consequence management should have been more explicit. The Royal Commission’s final report has delivered a clear, positive legacy and provides valuable guidance for legislators, regulators and organisations, including AMP.
The company’s life insurance business have been facing challenges due to the structural changes in the industry and regulation globally which has restricted its ability to compete on a sustainable basis and deliver acceptable returns to shareholders.
The company believe that the sale of this business is the right outcome for its business and shareholders it is expected that the majority of net cash proceeds from the transaction to shareholders upon settlement, subject to unforeseen circumstances.
According to the company’s chairman, FY18 was a difficult year for the company’s business and its shareholders but despite that the company maintained its strong capital position, holding A$1.65 billion above minimum regulatory requirements at year-end.
In 2019, the company is focused on transforming Australian wealth management business and to grow its New Zealand wealth management business. Further, the company is aiming to drive growth in AMP Bank and maintain growth momentum in AMP Capital.
Today, the company released the final Director’s interest notice of Geoffrey Ian ROBERTS and also provided a copy of its updated Constitution, which was approved by shareholders at AGM.
Now, let’s have a glance at the company’s stock performance and the return it has posted over the past few months. The stock is trading at a price of $2.240, down by 0.444% during the day’s trade with a market capitalisation of ~$6.63 billion as on 3 May 2019. The stock has provided a year till date return of -7.79% & also posted returns of -16.36%, 1.81% & -3.69% over the past six months, three & one-month period respectively. It had a 52-week high price of $4.180 and touched 52 weeks low of $2.070, with an average volume of ~13,443,809.
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