Stop changing rules on super, says AMP finance chief
Financial services heavyweight AMP has reported a turnaround in first-quarter cash flows, saying it was "time to blow the whistle on more changes to superannuation" after a political row over the way it is taxed.
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.