Stop changing rules on super, says AMP finance chief
In an address to shareholders at its annual meeting, chairman Peter Mason said sharemarket investors had "cause for optimism as 2012 progressed, and markets have generally been favourable since the beginning of the year."
But, he said, the combination of tech-savvy and value-conscious customers, an ageing Western world, the rise of the developed world and ongoing regulatory changes indicated that "there must be significant change in both the services provided by AMP and the way in which those services are provided by AMP and by financial advisers".
Mr Mason said 2012 "ended up being a better year than many had expected", with a European economic crisis seemingly averted and the US looking better.
"In Australia, a slowdown in mining investment is causing concern, as this is not being counterbalanced by increased investment in other sectors.
"Growth was relatively sluggish and interest rates stayed low, as has unemployment - relatively - and inflation," Mr Mason said. "But our exchange rate, having reached its highest level against the trade-weighted basket in almost 30 years, inhibits exports."
The comments came after the Reserve Bank cut the official cash rate to a decades-low of 2.75 per cent, and rumours that billionaire investor George Soros successfully bet $US1 billion on the decision caused a slight fall in the super-charged currency.
For the first quarter AMP reported net cash flows for its financial services arm of $95 million, a $387 million turnaround on the previous corresponding period. Total Australian assets under management were $89.9 billion, up 4.8 per cent on the previous quarter. Shares in AMP closed down 6¢ to $5.50 on Thursday. Its shares are up 14 per cent this year, valuing the Sydney-based company at $16.2 billion.
Brokerage Goldman Sachs said the retail inflows were higher than expected, but corporate super net flows were weaker than expected and self-managed super fund net flows were a "bit disappointing".
AMP's managing director of financial services, Craig Dunn, told shareholders both sides of politics needed to stop changing the rules on superannuation.
"It is time to blow the whistle on further changes to superannuation and as investment returns recover, to begin rebuilding the community's confidence in superannuation, by reminding Australian families just how much value superannuation can really deliver."
Mr Mason defended AMP's ongoing relationship with auditor Ernst & Young, after being questioned by an Australian Shareholders' Association representative about whether it was time for fresh eyes.
"Technically, it's really challenging to do it, and secondly and importantly we do believe we get good services out of Ernst & Young," Mr Mason said.
Frequently Asked Questions about this Article…
AMP reported first-quarter net cash flows for its financial services arm of $95 million, which represented a $387 million turnaround compared with the previous corresponding period.
AMP's total Australian assets under management were $89.9 billion, up 4.8% on the previous quarter, according to the report.
AMP's managing director of financial services, Craig Dunn, told shareholders both sides of politics should stop changing the rules on superannuation so that, as investment returns recover, confidence in super can be rebuilt and Australian families can be reminded of the long‑term value superannuation can deliver.
Shares in AMP closed down 6 cents to $5.50 on the day mentioned, while the stock was up 14% year‑to‑date, valuing the Sydney‑based company at about $16.2 billion.
Goldman Sachs said AMP's retail inflows were higher than expected, corporate super net flows were weaker than expected, and self‑managed super fund (SMSF) net flows were 'a bit disappointing.'
Peter Mason pointed to several themes relevant to investors: tech‑savvy and value‑conscious customers, an ageing Western world, ongoing regulatory change, a slowdown in mining investment in Australia, sluggish growth with low interest rates and inflation, and a high exchange rate that can inhibit exports.
When asked whether it was time for 'fresh eyes' on auditing, Peter Mason defended AMP's ongoing relationship with Ernst & Young, saying it's technically challenging to change auditors and that AMP believes it receives good services from Ernst & Young.
Yes. The article noted the Reserve Bank had cut the official cash rate to a decades‑low 2.75% and referenced broader market context — such as the European situation appearing to ease and the US looking better — and even rumours that an investor's large bet briefly affected the currency. These points were presented as part of the market backdrop to AMP's results and commentary.
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