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AMP's Credit Suisse old boys pursue private bank model

Aleks Vickovich
Aleks VickovichWealth editor

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AMP's shares hit a record low on Thursday afternoon after a major shake-up of its banking and wealth arms failed to arrest the embattled wealth company's downward spiral.

As part of chief executive Francesco De Ferrari's transformation strategy, AMP announced it will combine its wealth management and banking units under the banner of AMP Australia and the leadership of Alex Wade.

Alex Wade has been named chief executive of AMP Australia.  Nick Moir

While the two businesses will retain separate balance sheets, they will be integrated into one internal organisation with one senior executive at the helm for the first time.

Like Mr De Ferrari, Mr Wade is a former Credit Suisse executive, having previously run the Zurich-headquartered financial services giant's Australian and Asian private banking businesses.

He was one of Mr De Ferrari's first senior hires, joining AMP as chief executive of Australian wealth management in December 2018, and is seen as a loyal lieutenant and person of influence in the company's new-look leadership line-up.


“The strategy we set out in August is focused on reinventing AMP to be a client-led, simpler and more growth-oriented business," said Mr De Ferrari.

"Bringing together our bank and wealth management teams in Australia will drive a more integrated organisation better able to pursue the significant opportunity we see in providing more holistic wealth services for our clients."

The only certainty is that the trajectory AMP was on previously was not sustainable and lots of things needed to change

Simon Mawhinney, Allan Gray Australia

As part of the three-year transformation strategy outlined by Mr De Ferrari in August, AMP flagged further integration of AMP Bank with the wealth management business as part of its plan to reinvent the company.

Analysts and investors told The Australian Financial Review the move is the clearest sign yet that AMP, and the former Credit Suisse bankers now running the organisation, intend to pursue a model more akin to private banking than its traditional approach to wealth management and banking as structurally separate operations.

"AMP’s move to a more integrated banking and wealth model is hardly surprising, given Francesco De Ferrari’s private banking experience," said Morgan Stanley analyst Daniel Toohey.


Allan Gray Australia chief investment officer Simon Mawhinney, whose fund owns around 5 per cent of AMP, said he agreed the move looks as though the new leadership is moving the business in the direction of private banking, but said it is too soon to tell whether the pivot will succeed.

“The only certainty is that the trajectory AMP was on previously was not sustainable and lots of things needed to change," he told The Australian Financial Review.

'Falling into an old trap'

Mr Toohey said the combination of wealth and banking "makes sense" given the importance of both debt and assets to the financial lives of clients.

But other observers worry that the move could be a sign AMP is re-embracing a problematic form of vertical integration.

Paul Tynan, a consultant who spent more than 20 years at AMP in management, sales and distribution roles, cast doubt on the potential for the company to successfully pivot to a model more akin to private banking.


"Alex Wade and Francesco De Ferrari don't understand the 165-year history of the brand and haven't built up relationships with Australian consumers over time," he said. "The bulk of AMP's clients are suburban mums and dads, not high net worth individuals suited to private banking."

Mr Tynan said the creation of the AMP Australia business further vertically integrates the company, in contravention of a key criticism of the Hayne royal commission that models combining banking, financial advisory and funds management contain deep conflicts of interest.

“AMP is falling into an old trap of allowing bankers to run financial planning businesses and that hasn’t worked out well in the past," Mr Tynan said. “The banking mentality is about doing deals and moving product, not about long-term advice.”

Another analyst suggested the restructure could be motivated by AMP's desire to have its aligned financial adviser network more actively involved in helping to grow the mortgage book.

In with the new

The restructure will also see AMP Bank chief executive Sally Bruce depart the group in November.


She will be replaced by Rod Finch, who is managing director of wealth products and platforms. Lara Bourguignon – who was promoted to chief executive of AMP's self-managed superannuation fund administration subsidiary, SuperConcepts, in April 2019 – will take responsibility for the platform business in addition to her current role.

Ms Bruce's departure has been presented as a personal decision to relocate to Melbourne due to family reasons, but it also signals another key exit by one of the few remaining executives from the pre-Hayne AMP.

Former AMP chief executive Craig Meller, chair Catherine Brenner and general counsel Brian Salter left the troubled company in April 2018. Pally Bagri, chief risk officer in AMP's financial advice business, resigned shortly thereafter in May 2018.

Former wealth management boss Paul Sainsbury and head of advice Jack Regan, both of whom underwent intense cross-examination during the royal commission's public hearings, left the business in April 2019 and December 2018 respectively. Neither have re-emerged in roles elsewhere in the financial services industry.

A former National Australia Bank and Macquarie director, Ms Bruce joined AMP Bank as managing director in August 2015, when the company's share price was around six times higher than where it currently stands.

Mr De Ferrari said she has been an "outstanding leader" who delivered "double-digit earnings growth" and a "strong and inclusive culture".

"I am confident I am leaving AMP Bank in the hands of a strong team who will continue to drive the success of the business under AMP's new strategy," Ms Bruce said.

Aleks Vickovich leads the Financial Review's coverage of wealth management, specialising in the business and regulation of investment markets, financial advice and superannuation. Email Aleks at

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