AMP Wealth Management delivers solid performance and responds to Kiwis’ increased need for financial help and advice
- KiwiSaver specialist AMP Wealth Management has today reported FY 20 operating earnings of $38 million, a decrease of 19% on FY 19 largely due to the proactive closure of two legacy schemes in 2H 19, softer investment markets in the first half of FY 20 associated with the Covid-19 pandemic and margin compression relating to product repricing.
- FY 20 assets under management of $13.3 billion increased by $503 million (4%) on FY 19, predominantly driven by a combination of investment market gains of $564 million, offset by net cash outflows.
- Net cash outflows of $61 million improved from outflows of $457 million in FY 19, largely due to improved performance in the AMP KiwiSaver Scheme and platform business and the non-recurrence of the two legacy scheme closures in FY 19. Overall, the AMP KiwiSaver Scheme generated net cash inflows of $242 million in FY 20, while net cash outflows on platforms and other investments amounted to $303 million.
- FY 20 total controllable costs of $38.8 million were 10% up on FY 19 primarily due to the conclusion of cost sharing arrangements with AMP Life following separation and a reduction in costs on-charged to funds. The FY 20 cost to income ratio of 42.5% increased 7.1 percentage points on FY 19.
Blair Vernon, Chief Executive, AMP Wealth Management New Zealand, said:
“In a year that for most New Zealanders was defined by the impacts of Covid-19, we delivered a solid performance and did even more to support the wellbeing and retirement outcomes of our clients, during a time of increased demand for financial help and advice.
While the extended lockdown in the first half of FY 20 had some impact on sales activity, our core focus remained on finding new and innovative ways to help our clients weather the storm and stay on track to achieve their financial goals – including by providing ongoing financial guidance, regular communications, help with KiwiSaver hardship withdrawals, and access to market-leading digital tools and resources.
This included regular enhancements to our MyAMP app, such as the introduction of projected weekly KiwiSaver balances at retirement and the launch of BetterMoney, a free budgeting platform to help our clients take control of their money.
In October, we began the transformation of our AMP KiwiSaver Scheme and wider investment product suite through the appointment of BlackRock Investment Management, one of the world’s leading investment managers. By the middle of this year we will move to a simplified and improved investment structure to further deliver positive outcomes for our clients, with a key focus on sustainable investing and reducing the impacts of climate change.
Following the successful adoption of fully flexible working during the Covid-19 crisis and embracing the overwhelming feedback from our people who said they didn’t want to return to traditional ways of working, we commenced the process of exiting our office space in Auckland. We recently became the first business in New Zealand to be awarded a FlexReady Certification, from FlexCareers, reflecting our genuine commitment to workplace flexibility.
We also locked in some of the other positives of the pandemic, including reducing our carbon emissions by more than 70% compared to 2019 while attaining our Toitu carbonzero certification, and continuing to support the outstanding work of our community partners, including Living Wage Aotearoa and mental health charity Voices of Hope.”
Other key FY 20 highlights for AMP Wealth Management New Zealand:
- AMP KiwiSaver Scheme clients have an average KiwiSaver balance which is higher than the industry average ($29,587compared to $23,672 as at 30 September 2020).
- There were more than 2.7 million logins to MyAMP, and since launching the KiwiSaver estimated balance projections tool in the middle of 2020 clients have used it to test more than 345,000 combinations of fund type, contributions, retirement age and New Zealand Superannuation changes to understand how these factors influence their KiwiSaver balance at retirement.
- AMP KiwiSaver Scheme clients benefited from access to helpful guidance through more than 109,000 email interactions, 168,000 phone conversations, and 5,000 face-to-face meetings with clients in their workplace.
- AMP KiwiSaver Scheme clients received $67 million to help buy their first home; $115 million was paid to support clients in retirement; and $10.6 million to support those experiencing hardship.