Amp Limited · ASX:AMP
Amp — UBS Financial Services Conference 2007
28 slides from Amp's conference presentation, Jun 21, 2007
Slide 1: UBS Presentation & Enforceable Undertaking Update
ASX Announcement 24 June 2007 Manager Manager Company Announcements Office Market Information Services Section Australian Stock Exchange New Zealand Stock Exchange Level 4, 20 Bridge Street Level 2, NZX Centre, 11 Cable Street Sydney NSW 2000 Wellington New Zealand Announcement No: 30/07 UBS Present
Slide 2: Update on AMP Financial Planning Enforceable Undertaking with ASIC
21 June 2007 Information Only Update on AMP Financial Planning Enforceable Undertaking with ASIC AMP Financial Planning (AMPFP) is today providing an update on progress on the Enforceable Undertaking agreed with ASIC in July 2006, which primarily relates to the provision of superannuation switching
Slide 3: AMP's distribution — driving sustainable growth
AMP’s distribution — driving sustainable growth Today, | want to: * remind you of AFS’s organic growth strategy, the rationale underpinning that strategy, and the positive outcomes it has delivered . and also to share some new information with you, that demonstrates how we are actively evolving this
Slide 4: AFS is pursuing a simple and disciplined strategy
AMP Financial Services (AFS) is pursuing a simple and disciplined strategy Strategy leverages comparative advantages of: Financial Planning, Advice and Services (FPAS) to be the partner of choice for financial planners and lead the market for quality advice Fr Seale Brand Product Manufacturing Distr
Slide 5: Choosing where and how to compete is fundamental
Choosing where and how to compete is fundamental « AFS growth focus on core markets: » financial planning ® superannuation / pensions » risk Insurance " Key to AFS's sustained growth over the long term: ~ targeting profitable market segments where we hold comparative advantages and capabilities » fl
Slide 6: Current strategy has delivered strong growth in operating earnings
Current strategy has delivered strong growth in operating earnings 0%: G.BE%. O.BO%: G15%: B78%: G.65%: B.B0%: G55%: - 8.50%. 2006. Operating earnings mh Operating earings to ALM This strategy has delivered positive outcomes for shareholders — with strong growth in operating earnings over the past f
Slide 7: Market leadership in retail managed funds net cashflows
Market leadership in retail managed funds net cashflows AMP niet ‘AMP. rolling 42 month net cashflows {ex CMTS) AMP: ranking nashflows: and AMP. net cashtiows as % of industry % share ASm: ofnet cashflows: ‘$1000 5000: eMart: dune Seps Dede: Mar lune -Seps Ded: 3 3 See ies Da Oa Re Oe: § 5. Source:
Slide 8: Growth strategy is based on deepening existing channels and selectively developing new channels
Growth strategy is based on deepening existing channels and selectively developing new channels Key channel Approach to channel by AMP — Opportunities for AMP AES Product Manufacturing 3 : Hisk insurance, Employers. AMP Capital Investors Financial planners: : Advice and produ stail and corporate : A
Slide 9: Clear criteria in place to optimise channel selection
Clear criteria in place to optimise channel selection * Key is ensuring AMP has sustainable competitive position in the channel and that we can profitably exploit tis » Potential channels assessed for: » Industry. profit pool accruing te the channel and future growth profile ®» Relevance of our basi
Slide 10: Business benefits of strong employer super position
Business benefits of strong employer super position Significant exposure to key channel in superannuation, including how most people begin their exposure to superannuation Sticky contracts with good revenue growth — member growth, wage inflation growth, growth in non-SG member contributions / consol
Slide 11: Three key channels to superannuation: employers, planners and accountants
Three key channels to superannuation: employers, planners and accountants Superannuation market by channel ‘Accountants / Solicitors / stockbrokers 7 otter: Financial planners: 86%: infidation Pet This chart reinforces the point of how important employers are as a channel into superannuation, along
Slide 12: AMP has built a strong position in employer channel
AMP has built a strong position in employer channel — highest growth, market leadership ‘AMP fastest growitg employer super provider Comparative advantage of AMP Employer sponsored products by assets under management: ‘eniployer super. clent perspective: ao Leading market position and strong brand a
Slide 13: Power of AMP's aligned planner model
Power of AMP’s aligned planner model » Model of self-employed planners operating under AFS license creates alignment of interests — for consumers, planners and AMP » For consumers, large institutional backing for planners in local communities provides necessary security and peace of mind about their
Slide 14: Two distinct planner groups create powerful presence in market
Two distinct planner groups create powerful presence in market AMP Financial Planning (AMPFP) 1,233 self-employed planners; 780 practices? 476 Certified Financial Planners’ “Average planner age 43+ 49% in industry: 10+ years, compared to: industry median oF 31%" 49% with dealer group 10+ years; comp
Slide 15: AMP's aligned model has scale and is highly productive
AMP’s aligned model has scale and is highly productive g AMP Financial Planning 2 oS 2 £ 3 = oS g S os & Commonwealth FP. © Millenniom 3 5 san ep @ Westpac FP Genesys jt ABN Amro Morgans MLC FP EGarval Ah Hillross: Bridges: Retirelnvest BNO 40,000 15,000 20,000 25,000: 30:00: 35,0008: 40,000: 45.000
Slide 16: AMP planner network is increasingly well qualified
AMP pianner network is increasingly well qualified Planner and Certified Financial Planner (CFP) numbers" for main competitors December: 2006: ‘A CeRs $3000 #000 200: 200 700: ‘BOD. 500: eS a a cS) 2 a $ 2 = =: = 8 € 5 2 planner qualification
Slide 17: Planner scale delivers cost advantages to AMP as well
Planner scale delivers cost advantages to AMP as well Licenses: cost to: ravenue ratio. Licensee costs per adviser. {excluding adviser remuneration) (excluding adviser remuneration) AMPFP compared fo sample of dealer groups! AMPFP compared ts sample of dealer groups!*! 80% Gf group median ‘Group med
Slide 18: Real growth advantage for those who get planner opportunities right
Real growth advantage for those who get planner opportunities right » Advice model has continuously evolved from its origins ® Life insurance agents to advisers to financial planners Driving change to meet regulatory requirements > FSR lifted professionalism of industry; but impacted planner product
Slide 19: Sustainable growth in advice business being driven in four key areas
Sustainable growth in advice business being driven in four key areas AFS strategy ’ FPAS 2007-2011 strategic objectives to be the partner of choice for financial planners and lead the market for quality advice : Key drivers of growth And to get this right, in our view there are 4 levers of growth th
Slide 20: Strengthening our value proposition
Strengthening our value proposition AMP: Financial Planning Lower cost to: serve: pre-eminent-brand|:lowers marketing costs: integrated advice: and product lodgement processes: access ta: low cost-ang tailored business: senvices that-are key to enhancing productivity (eg; paraplanning and Sowtouch’)
Slide 21: Improving advice standards
Improving advice standards Revised Professional Standards Manual with further changes dug-end 2002. New standards to enhance advice to customers: Aplomated and:impraved SoA; Fact-Find; Product: Comparison Checklist Eribanced quality assurance on super switches New compl rds and scoring regime iding
Slide 22: Increasing planner productivity
Increasing planner productivity 7 Rationalisad:onine: client applications to single frant end (MyBusin Portal a lgerea inner technology investment to enhance plannerand licenses productiviit while improving sk management! pr = Continved integration of planner and predict systems t amine business lod
Slide 23: Increasing planner productivity
Increasing planner productivity *: Dedici ‘programs delivered:to plan iG Imiptove their business strategy and processes. 6g client mahagement and marketing g field ianagement support d fed'to enhanced bu B marketing; suc * Award-winning technical support lean consistenily rankad by Assint among Aust
Slide 24: Growing planner numbers
Growing planner numbers lacteased specialised resources to recruit new planners. improved marketing and recruitment material Aigned processes to better match supply-and demand’ Enhanced coaching and mentoring Improved ‘supped for practices transitioning troni-oiher licensees Piloting new planner ind
Slide 25: Growth opportunities driven by key advantages
Growth opportunities driven by key advantages: scale, brand, distribution footprint, and low cost manufacturing platform Distribution or market access key to success in wealth management Disciplined focus on segments that offer most opportunity for profitable growth > emerging growth opportunities i
Slide 26: Appendix
Appendix 24
Slide 27: AMPFP Enforceable Undertaking (EU) update
AMPFP Enforceable Undertaking (EU) update Around 5% of the 35,000 customers offered a review of their advice under the EU terms have taken up the offer to date Those reviews have been conducted and around 1,500 customers have now been offered rectification if they want it Review checked files agains
Slide 28: EU background
EU background » On 27 July 2006, AMPFP offered an EU to ASIC containing four undertakings in relation fo superannuation switching: ‘Asmendiment of procedures and disclosures rélating to super Switching advice Offer of rectifisation for customers who switched stiperannuation products: fio. reasonable