The sale of AMP Life, our Australian and New Zealand wealth protection, and mature businesses, was completed on 30 June 2020 and represented a significant milestone in the simplification of our business, reducing our risk liabilities and allowing a fundamental reset of our capital management initiatives. As part of the transaction, our people delivered one of the largest successor fund transfers in Australian history with teams working remotely during the COVID-19 lockdowns. AMP now retains a residual 19.13% equity interest in Resolution Life Australasia.
A decision to retain and grow the New Zealand wealth management (NZWM) business was announced in May 2020. To date, substantial progress has been made to further simplify the business, including the acceleration of digital enhancements for clients, the automation of client-facing technology including the repatriation of all offshore processing and a simplified distribution model with ~66% of AUM managed via AMP and AdviceFirst employed advisers.
In AMP Australia, we made significant progress with 75% of the advice reshape program complete, super simplification through the reduction in products and a core technology renovation and improved digital services for our AMP Bank clients.
In AMP Capital, we shifted our focus towards private markets and continued to deploy capital and make divestments. We refocused our public markets businesses to better support clients with a view to transferring our multi-asset group to AMP Australia in the near future.
In 2021, our efforts will shift to building on these foundations as we look to capitalise on the execution momentum achieved in 2020. Our focus will turn to delivering on 10 priorities in four key areas:
Reinvent wealth management in Australia
Grow the New Zealand business
Expand asset management footprint in private markets
Create a simpler, leaner business.
1. Complete reshape of advice
In 2021, we will complete the advice reshape program to establish a commercially sustainable and competitive business model. We will deliver technology solutions to enable practice efficiencies, increase advice accessibility by uplifting our phone-based advice capabilities and continue our support for our adviser network as we complete client migration to Annual Advice and Service Agreements.
2. Complete next phase of superannuation simplification
Building on the execution momentum of 2020, our next phase of building a best-in-class superannuation business will reposition the business for growth. We will refine our product offering, with a primary focus on stabilising outflows by improving investment returns and reducing operating costs while retaining a competitive market position.
3. Grow platforms business
We remain steadfast in our commitment to equip advisers with the necessary tools and information to better serve our clients. To deliver on our growth targets, we will leverage existing relationships within the adviser community to grow our external financial adviser (EFA) cashflows and position North as the platform that best enables adviser efficiency. We will continue our work on the enhancement of North’s functionality and optimise our retirement offering to ensure North is fit-for-purpose and equipped to capitalise on industry trends.
4. Recover growth in AMP Bank
To support the delivery of this priority, we will further upgrade our technology offering through MyAMP enhancements to drive an increase in penetration, while continuing to refine our operations to sustain a better than peer cost-to-income ratio. Digital and direct sales capabilities will be enhanced while we simultaneously strengthen our broker channel engagement and expand our whole-of-wealth offer to our existing workplace super members.
5. Complete investment renovation and reposition for growth; leverage AdviceFirst leadership position through practice acquisitions
In February we completed our first advice practice acquisition for 2021 and expect to extend our leadership position with further acquisitions in the year.
With ambitions to further build out this key part of the business, we expect to grow AUM directly managed through AMP and AdviceFirst employed advisers. We will continue to drive the localisation of the business, with an ongoing commitment to our digital transformation to deliver a leading digital experience for our clients.
6. Scale flagship infrastructure equity and infrastructure debt fund series
Our priority in 2021 is the continued deployment of over $4 billion of uncalled committed capital available to invest in quality infrastructure and real estate assets on behalf of our clients around the world. As we continue to fundraise in the highly successful Global Infrastructure Fund (GIF) and Infrastructure Debt Fund (IDF) series, we will also look at opportunities to enhance and expand our global footprint. A key focus will be to explore opportunities in adjacent sectors where we are able to capitalise on market dislocation and emerging macroeconomic trends.
7. Successfully manage real estate through market disruption
In 2021, we will transfer our multi-asset group (MAG) to AMP Australia to create an end-to-end superannuation and investment-platform business. For our listed equities and fixed-income business, we will explore partnership opportunities to scale the business and accelerate its growth to maximise shareholder value.
8. Deliver $250 million in cumulative gross cost savings
We remain committed to delivering $300 million cumulative gross cost savings in our original FY 2022 timeframe. As at 31 December 2020, $121 million of gross cost savings have been delivered, with a further $130 million of additional gross cost-out targeted in FY 2021.
9. Continue to embed an inclusive, accountable, and high-performance culture
Recognising the importance of our people in transforming our business, our commitments will be underpinned by
ongoing initiatives to embed an inclusive, accountable, and high-performing culture within AMP.
10. Complete buyback once portfolio review has concluded, repay corporate debt
The board is committed to restarting AMP’s capital management initiatives including the share buyback and payment of dividends in 2021.