The first half of 2025 is shaping up as an important period in the reinvigoration of AMP’s superannuation business, with a digital advice offering and new products in the pipeline, and group executive superannuation and investments Melinda Howes set to harness the additional horsepower of some recent key recruits.
The AMP group is placing great store in the performance of its superannuation division as part of its turnaround plan under chief executive Alexis George, which aims to position AMP as having a clear point of differentiation when it comes to helping superannuation fund members make the transition from accumulation to retirement.
“I think a lot of people are looking with interest at the old AMP versus what’s happening in here now,” Howes tells Investment Magazine.
“I’ve been really fortunate to be able to attract some great talent into this team, which complements the really strong existing team I had. A couple of the appointments have been to replace people who’ve left, but a key additional role that I’m putting in at the moment is a director of growth and customer solutions, which is the new term I’m using for product.”
AMP announced earlier this month that Julie Slapp has been appointed as director for growth and customer solutions and Cloe Reece as general manager, risk, compliance and policy. Slapp was most recently the general manager for wealth at Flare, leading super partner relationships to optimise member engagement; and Reece was most recently the chief risk officer at Clearview and has served in senior leadership roles across the big four banks in Australia.
Howes says much of the heavy lifting to simplify the AMP product range was completed before she joined the business in January this year.
“What I’ve got coming in here in January is a single go-forward product,” she says.
“It’s all simplified, [with] really good operations behind a great service. And so, it’s a really fortunate position to be in. Now we’re swinging into growth and innovation mode. [There’s] a lot of things in the pipeline…but it’s how we really then join all that up together, and what is the next offer?
“And that’s really where we’re going with some of the new talent I’ve brought in.”
Digital advice ramps up
A digital advice offering is pivotal to joining up the offer. Howes says AMP has “a strong heritage and a deep understanding of financial advice, and that’s across a range of different types of advice”, and where this intersects with superannuation products is in “providing help [and] guidance, but then being able to extend into advice services, predominantly intra-fund advice, that will help people and guide them through journeys”.
“That will be a combination of digital and phone-based, and really help them make those key decisions,” Howes says, but it will not include comprehensive advice.
AMP recently sold its advice licensees to the advice licensee business entirety in a $10 million deal, and it sold its equity stakes in a number of AMP Financial Planning practices to AZ NGA.
“We’ve always offered phone-based, or for many years, phone-based retirement advice services, and what we’ll be doing next year is extending that into digital enablement of that service; there will be a hybrid offering,” Howes says.
“We think what we have will be market-leading. We’ve looked at what the others are doing, and there’s some differences in what we’re looking to bring in, maybe a slightly different focus. We think it’s going to have some unique features.”
AMP serves about 600,000 super fund members, sourced from around 40,000 employers.
“Historically, a lot of the fund that came in a long time ago was written through financial advisers, but advisers usually now write their new business onto platforms. And then we’ve got direct customers that join us online, and we’ve got quite a significant volume of that, and increasing as well.”
Howes says AMP needs to be ready to provide information, advice and guidance to a significant proportion of them.
“Let’s say, 200,000 of those members want to have a conversation with us next year. That would be a great problem to have,” she says.
“It might take me a while to scale up, but digitally we can do that: 200,000 members with a digital experience that is quite comprehensive. That’s what we’re looking at doing. Not comprehensive advice, but a comprehensive journey.”
Blurring lines
The restoration of AMP’s superannuation offer is a sign that the competition posed by the retail sector to the profit-to-member super is ramping up. Along with Insignia Group and Colonial First State, the retail players are refining product offerings and making rapid inroads into the provision of retirement income solutions and financial advice and guidance, areas that many profit-to-member funds continue to struggle with, despite their obligations under the Retirement Income Covenant.
Howes says the lines between retail and profit-to-member funds are blurring.
“I think different funds in both sectors have their key advantages and disadvantages, as do [the] sectors,” Howes says.
“Increasingly, the business models are coming together, and I’ve been seeing that over the last five years. If you look at what’s required to run both now, both have to have capital and have to fund it. Both have a range of service providers in their business model, which are for-profit. Both have to come up to very high bars on customer service and risk management. The cost of operation going forward will be very similar for both models.
“So, to the extent there’s been different bars or different levels, or different amounts of investment spend, I think going forward those differences will evaporate. And a lot of that has already happened.”
A session at the Investment Magazine Fiduciary Investors Symposium in Healesville examined the different operating structures that exist across the superannuation industry, and while it focused on different approaches to structuring investment operations and why those structures have developed, a factor that was not addressed directly was the retail versus profit-to-member issue. Other than the artefact of product proliferation that characterised retail providers – and which Howes says, in AMP’s case, has been addressed – the underlying structural issues are the same regardless of sector.
“[Differences] fall away to some extent when you look through to the underlying construction of the businesses, and increasingly, there’s variation within the sectors as well,” Howes says.
Howes says there’s only a handful of funds now that can count on a guaranteed inflow of new members every year; the others must go head-to-head in a competitive market.
“If I talk about AMP, and the same probably applies to some of the other retail funds as well, [we have] deep experience and expertise in retirement and the requirement to have strong customer service,” she says.
“[Everyone] has to have a strong customer value proposition. If you don’t, the member could leave tomorrow – things like having to hold more liquid investments, things like having to have strong customer service, or members are very mobile, and they will leave.
“That’s been a constant challenge in the in the retail sector, always, and I think it’s now a challenge across 98 per cent of the industry.”
