Amp Limited · ASX:AMP
Amp — UBS Conference 2009
15 slides from Amp's conference presentation, Jun 24, 2009
Slide 1: ASX Announcement: Presentation by Craig Meller
ASX Announcement 24 June 2009 For personal use only 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 AMP Limited
Slide 2: Wealth management in the new world
For personal use only Wealth management in the new world Craig Meller Managing Director, AMP Financial Services 24 June 2009
Slide 3: Summary
Summary The wealth management industry is undergoing For personal use only rapid, significant change AMP Financial Services (AFS) is performing well relative to competitors and market conditions AFS is well placed to capitalise on change Evolving from a position of strength to prosper in new
Slide 4: Significant change in the wealth management industry
Significant change in the wealth management industry For personal use only The global financial crisis has placed the Australian wealth management industry under severe stress Consumers are questioning the value they receive from the industry – both advisors and product providers Risk manageme
Slide 5: Significant change in the wealth management industry
Significant change in the wealth management industry For personal use only Unprecedented levels of government and regulatory review Ripoll inquiry Henry review Cooper review Focus is on: governance structure efficiency 4
Slide 6: Significant change in the wealth management industry
Significant change in the wealth management industry For personal use only Likely outcomes 1. Consumers will prefer strong and trusted brands, adopt a lower risk tolerance and seek simpler, more transparent solutions to their needs 2. The role, importance and value of good advice will be better un
Slide 7: Consequences of a new wealth management world
Consequences of a new wealth management world For personal use only 1. Benefits of a vertically integrated model will become clearer Consumers trust brands and people Only vertically integrated businesses can afford to guarantee the advice they provide Wealth managers will need to continue to
Slide 8: Consequences of a new wealth management world
Consequences of a new wealth management world For personal use only 2. More consumers will recognise importance and value of good advice Middle Australia’s three key financial needs Owning home Protecting family Retiring comfortably Australians owe $44b 4m Australians falling on credit cardsº behi
Slide 9: Consequences of a new wealth management world
Consequences of a new wealth management world For personal use only Three drivers of future planning models End customer focus will be enhanced Industry will move from ‘cottage’ to ‘industrialised’ Personal relationships will remain key Planning models will serve three key segments 1. Mass
Slide 10: Consequences of a new wealth management world
Consequences of a new wealth management world For personal use only 3. Industry will operate on a lower cost base Change will be similar to manufacturing industry in late 1970s, early 1980s Average fees for superannuation industry were 1.21% in June 2008, down from 1.26% in June 2006, and 1.37%
Slide 11: AFS evolving from a position of strength
AFS evolving from a position of strength AFS performance to date demonstrates business For personal use only resilience 2008 AFS operating operating earnings down only 4% on FY 07, despite 19% fall in AUM $2b net cashflows into super and pensions business in 2008 Q1 09 net cashflows this yea
Slide 12: Size and strength of distribution footprint a key differentiator
Size and strength of distribution footprint a key differentiator For personal use only AMP distribution Third-party Aligned Employer- Aussie Home distribution sponsored Loans super Mortgage brokers IFAs 2,000+ financial 500,000+ planners through members AMPFP, Hillross, Direct Horizons & AMP Banking
Slide 13: Significant unit cost reductions providing flexibility to respond
Significant unit cost reductions providing flexibility to respond For personal use only 600 574 546 553 560 533 535 500 111bps 100bps 87bps 400 69bps 42.8% 76bps 75bps 300 40.8% 38.5% 200 34.2% 100 35.2% 35.4% A$m 0 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 Controllable costs Cost to income ratio Controll
Slide 14: Evolving our business model for the new world
Evolving our business model for the new world For personal use only Simple, best-of-breed products, e.g. Flexible Lifetime – Super Easy ‘Modular’ advice and product solutions More distribution capacity More planners Direct distribution More efficient distribution More client-facing tim
Slide 15: Summary
For personal use only Summary AMP’s vertically integrated model brings real benefit to the end customer This will not change, regardless of how our industry changes However, we understand the need to evolve the model so it’s fit for the future The inherent strengths in our business mean we a