Written

For

The

Australian

-

The

shrinking

of

AMP

hits

home

More than 2,600 financial planners quit the industry last financial year. The pool of advisers has shrunk from 28,000 to just 16,000 in a few years. And nowhere is this collapse more visible than at AMP, where planner numbers have plunged nearly 60 per cent in three years — from 2,474 down to under 1,000.

I have some skin in this game. Back in 2010 I was a young planner at an AXA-licensed firm that merged into AMP the following year. AMP had decent products, but they weren't right for everyone — and recommending anything outside the tent required jumping through hoops that felt, cynically, designed to wear you down. My tipping point came in a 2015 compliance audit where the focus wasn't on my client files (they were fine), but on how to lift my AMP "share of wallet" above 50 per cent. Within a month, I'd applied for my own licence.

To AMP's credit, when I put this to Matt Lawler, their managing director of advice, he says things have changed. AMP now runs an "open architecture" approved product list "as wide as any other" licensee, and advisers are "unencumbered" to act in the client's best interest.

But the shrinkage isn't just about culture. Education standards have been lifted, the ethics exam is now mandatory, grandfathered commissions are gone, and compliance and licence costs keep rising. AMP has consciously shifted toward fewer, larger practices. Smaller sole-trader planners have simply been priced out.

The rivers of gold that once flowed to the banks and big licensees from in-house product sales have dried up, so licence fees have gone up to compensate. That cost gets passed to advisers, then to clients — which is exactly why financial advice has become unaffordable for the people who need it most, particularly younger Australians.

Treasury's Quality of Advice report lands in December. I'm hoping it strips away enough red tape to let planners get back to actually advising.