Financial services giant AMP Ltd (ASX:AMP) has announced a strategic partnership with Entireti Ltd (previously known as Fortnum Private Health) and AZ Next Generation Advisory Ltd to help in the development of a sustainable business model for its AMP Advice Business.
According to the partnership, Entireti will acquire AMP’s advice licensees – Charter, Hillross and AMP Financial Planning – as well as self-licensed offer Jigsaw for $10.2 million, with these being grouped under a newly created joint venture entity, NewCo, in which AMP will hold a 30% stake.
Crucially, this development will push Entireti Services to the top position as Australia’s largest financial advice business service provider, with over 1,300 advisers.
Meanwhile, AZ Next Generation Advisory will take on AMP’s minority stakes in 16 advice practices for $82.2 million.
The new arrangement follows a bumpy few years for AMP in terms of legal issues.
In May 2023, the Federal Court ordered two AMP companies – AMP Life and AMP Financial Planning – to pay a combined penalty of $24 million after they breached the law by charging life insurance premiums and advice fees from the superannuation accounts of more than 2,000 deceased customers.
And a year before – in September 2022 – five companies that are or were part of the AMP Limited group were ordered by the Federal Court to pay $14.5 million in penalties for charging fees for services that were not provided to 1,452 superannuation members.
AMP CEO Alexis George said the new arrangement underscored AMP’s desire to invest in the future of the advice business, with this partnership set to transform the advice industry landscape in Australia – creating the largest advice business services provider, combined with flexible capital support.
“AMP has been dedicated to creating a new model for our advice business to provide
certainty for AMP advisers and our people,” she said.
“Over the past three years we’ve made significant progress in transforming AMP Advice into
a sustainable, standalone advice business: we introduced a new service model, opened the approved product list, reduced operating costs and improved services to advisers which has significantly lifted adviser satisfaction.
“At the same time, we’ve considerably strengthened the North platform proposition to be compelling for both AMP advisers and Independent Financial Advisers.
“It was important in choosing these two partners that they had a strong track record, deep
experience and shared AMP’s commitment to delivering quality advice to more Australians: advisers will benefit from the combined scale of these businesses, delivering new services
and technology, with capital backing.”
AMP has been trading at $62.28