Growing super’s $3 trillion funds pool

Original article by Glenda Korporaal
The Australian – Page: 21 : 26-Feb-20

Data from the Australian Prudential Regulation Authority shows that the total value of assets managed by the nation’s superannuation funds increased by 13 per cent to $2.951bn in 2019. Rice Warner forecasts that the super pool will increase to about $7trn by 2034, and so-called mega funds will dominate the sector. MySuper accounts boasted assets under management of $802bn at the end of 2019, up nearly 20 per cent, while self-managed super funds had assets totalling $739.7bn, an increase of 7.8 per cent.

CORPORATES
AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, RICE WARNER ACTUARIES PTY LTD

From bad to worse for AMP: $2.5bn loss, $6.3bn outflows, more to come

Original article by Joyce Moullakis
The Australian – Page: 19 & 23 : 14-Feb-20

Wealth manager AMP has posted a statutory loss of $2.5bn for the 2019 calendar year, while its underlying profit fell by 32 per cent to $464m. A $2.35bn impairment charge in the first half was the major contributor to the big loss. Meanwhile, AMP’s wealth division recorded net cash outflows of $6.3bn for the year, and CEO Francesco De Ferrari says outflows are likely to be high again in 2020. AMP has advised that its customer remediation program is expected to be completed in 2021.

CORPORATES
AMP LIMITED – ASX AMP

NAB, ANZ to be grilled over wealth exits

Original article by Aleks Vickovich
The Australian Financial Review – Page: 20 : 15-Nov-19

A federal parliamentary committee is examining the financial services sector’s response to the Hayne royal commission. ANZ Bank CEO Shayne Elliott and National Australia Bank chairman and acting CEO Philip Chronican will appear before the committee on 15 November. Shadow assistant treasurer Andrew Leigh, who is the committee’s deputy chairman, says he is concerned about the amount of time the two banks are taking to divest their wealth management units; he says the general public expects the divestments to proceed.

CORPORATES
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, NATIONAL AUSTRALIA BANK LIMITED – ASX NAB, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA

Banks, super face new round of compo costs

Original article by Joyce Moullakis
The Australian – Page: 21 : 7-Nov-19

Law firm Minter Ellison has warned that banks and wealth managers could face additional customer remediation costs if Westpac does not appeal against a recent judgment regarding the provision of financial advice. Minter Ellison partner Andrew Bradley says the Federal Court’s decision to overturn a judgment in favour of Westpac could also prompt more class actions in the financial services sector. The case centred on the distinction between general and personal advice.

CORPORATES
WESTPAC BANKING CORPORATION – ASX WBC, MINTER ELLISON, FEDERAL COURT OF AUSTRALIA, AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION, HERBERT SMITH FREEHILLS PTY LTD

IOOF to push ahead with buyout of ANZ’s wealth arm

Original article by Andrew White
The Australian – Page: 21 : 18-Oct-19

Shares in wealth manager IOOF Holdings rallied on 17 October after it moved a step closer to completing a deal to acquire the ANZ Bank’s OnePath pensions and investments division. IOOF has advised that it will pay just $850m for the business if it gains regulatory approval by 30 June. This represents a 13 per cent discount to the previously agreed purchase price. Meanwhile, the Australian Prudential Regulation Authority has indicated that it will not appeal a recent Federal Court decision that cleared five IOOF executives and directors of misconduct.

CORPORATES
IOOF HOLDINGS LIMITED – ASX IFL, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, ONEPATH AUSTRALIA LIMITED, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, FEDERAL COURT OF AUSTRALIA

AMP to hit costs in bank merger

Original article by Cliona O’Dowd
The Australian – Page: 17 & 23 : 11-Oct-19

Bell Potter analyst Lafitani Sotiriou has questioned AMP’s decision to merge its bank and Australian wealth divisions, suggesting that it is "strategy on the run". Allan Gray Australia CEO Simon Mawhinney in turn says the move raises conflicts of interest concerns. An AMP spokeswoman says the two businesses will have separate financial services licences and will remain separate legal entities after being folded into the new AMP Australia. Alex Wade will be CEO of the combined business.

CORPORATES
AMP LIMITED – ASX AMP, AMP BANK LIMITED

IOOF no closer to ANZ deal after court win

Original article by Joanna Mather, Aleks Vickovich
The Australian Financial Review – Page: 13 & 17 : 23-Sep-19

The Australian Prudential Regulation Authority has failed in its court case against IOOF Holdings, in which it sought to argue that the financial services company breached its obligation to act in its members’ best interests. It had been the first time in more than 10 years that APRA had taken superannuation trustees to court, with Federal Court Justice Jayne Jagot finding that its legal arguments were "unpersuasive". Despite APRA’s lack of success in the case, industry observers say it does not mean that IOOF is guaranteed to complete its takeover of the ANZ Bank’s wealth unit.

CORPORATES
IOOF HOLDINGS LIMITED – ASX IFL, AUSTRALIAN PRUDENTIAL REGULATION AUTHORITY, AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED – ASX ANZ, ALLENS, ADVISER RATINGS PTY LTD, MORGAN STANLEY AUSTRALIA LIMITED, MORNINGSTAR PTY LTD

S&P gives AMP thumbs down over bad news

Original article by James Frost
The Australian Financial Review – Page: 19 : 28-Aug-19

The credit rating of wealth manager AMP has been downgraded from ‘A-‘ to ‘BBB+’ by S&P Global Ratings. The long-term issuer credit rating of AMP Bank and AMP Life have also been downgraded by one notch apiece. S&P has indicated that the ratings downgrade was primarily due to the recent deal to sell AMP Life to Resolution Life, which will have an impact on AMP’s group credit profile. S&P also said it may review AMP’s credit rating if the deal does not proceed, although this may not result in an upgrade.

CORPORATES
AMP LIMITED – ASX AMP, AMP LIFE LIMITED, AMP BANK LIMITED, S&P GLOBAL RATINGS, RESOLUTION LIFE GROUP LIMITED

Investors query AMP turnaround

Original article by James Frost
The Australian Financial Review – Page: 17 & 22 : 9-Aug-19

AMP has announced a loss of $2.3bn for the first half of 2019 and a new strategy to turn around its fortunes. Amongst other things, the wealth manager aims to reduce costs by about $300m a year. AMP has also flagged plans to significantly reduce the number of financial advisers in its network and place more emphasis on so-called roboadvice. AMP will also continue to pursue the sale of its life insurance business to Resolution Life, while it will issue new shares at $1.50 apiece via a $650m capital raising.

CORPORATES
AMP LIMITED – ASX AMP, RESOLUTION LIFE GROUP LIMITED, MERLON CAPITAL PARTNERS PTY LTD, ALLAN GRAY AUSTRALIA PTY LTD

No-win, no-fee prevails in AMP class action face-off

Original article by Michael Pelly
The Australian Financial Review – Page: 8 : 24-May-19

Five law firms filed class actions against AMP in the wake of ‘the fee for no service’ scandal that was unearthed by the banking royal commission. However, NSW Supreme Court Justice Julie Ward ruled on 23 May that only one action, which is a combined effort between Slater & Gordon and Maurice Blackburn, can proceed. Ward said Maurice Blackburn will have to put up $5 million as security for AMP’s expenses, while AMP advised in a statement that it intend to vigorously defend the class action.

CORPORATES
AMP LIMITED – ASX AMP, SUPREME COURT OF NEW SOUTH WALES, SLATER AND GORDON LIMITED – ASX SGH, MAURICE BLACKBURN PTY LTD, QUINN EMANUEL URQUHART AND SULLIVAN LP, SHINE LAWYERS, PHI FINNEY McDONALD PTY LTD