Future of AMP NZ remains undecided following Aussie revelations

Blair Vernon, managing director AMP Financial Services, says it is working actively with New Zealand regulators. Photo/Supplied.

The future of AMP's New Zealand business remains undecided after its Australian parent said it was prioritising the performance of the business, finding a new chief executive and replacing its board in the wake of the fall-out from damning revelations at Australia's financial services inquiry.

AMP, which will hold its annual general meeting in Melbourne today, had been due to give an update by today on the progress around reviewing the future of its New Zealand business, Australian wealth protection and mature businesses.

There has been speculation that AMP, which is already listed on the Australian stock exchange would consider spinning out its New Zealand arm for a separate listing on the NZX.

But AMP's interim executive chairman Mike Wilkins said in a statement to the exchange that while the review was still progressing it was focusing on other priorities.

"We continue to progress the portfolio review; however, we are currently prioritising the performance of the business, board renewal and the appointment of a new CEO."

Wilkins has taken the reins at the firm after the resignation of chief executive Craig Meller and chair Catherine Brenner in the wake of revelations at a hearing for Australia's Royal Commission which found AMP had charged fees for no services and lied to the regulator about breaches.

Three directors of its board have also resigned this week ahead of its AGM and a fourth director, New Zealand lawyer Andrew Harmos, also faces being voted off the board today.

Wilkins said the past month has been exceptionally difficult for its customers, shareholders, employees and advisers.

"We recognise there is a lot to be done to restore the public's confidence in the company,
which is a priority for the Board.

"AMP stands behind its advice business, and the value it creates for customers. However, we have been very disappointed that, in some instances, our customers have not received appropriate levels of service for the fees they have paid.

"We are working hard to accelerate the remediation for our customers."

The company also revealed in a statement to the ASX today that it is facing two class action proceedings from shareholders.

The value of AMP's shares has plunged in the wake of the Royal Commission's hearing.

AMP said it would vigorously defend the proceedings.

Blair Vernon, AMP New Zealand managing director, said it would be business as usual for AMP in New Zealand.

"We continue to evolve our proven strategy, drive and maintain our strong track record of solid performance, and most importantly live up to our deep commitment to supporting our customers."

AMP's New Zealand business is also under the spotlight of regulators here.

Last week the Financial Markets Authority and Reserve Bank met with all New Zealand's banks to tell them to provide proof they do not have any of the same issues identified in Australia through the Royal Commission.

The FMA said it had also been having separate talks with AMP in New Zealand which is not a bank but is the third largest KiwiSaver provider and also provides insurance, investments and financial advice.

Vernon said it fully supported the efforts by New Zealand regulators to maintain consumer trust and confidence in the industry and was actively engaged in responding to the current review of local providers.

"We welcome the opportunity to demonstrate the integrity of our business and operations and the many ways in which we protect the financial well-being of our customers."

Vernon said AMP was proud of its strong track record which included putting things right when it needed to.

"That's underpinned by our rigorous focus on compliance and good conduct and the open and transparent relationship we have with New Zealand regulators and the Insurance and Financial Services Ombudsman."