A surprisingly upbeat reaction from investors to the news that embattled wealth manager AMP continued to see retail investors move cash out of its funds in the three months to September 30.
The shares rose 1.4% to $1.815 on the news that the outflow accelerated in the quarter to a massive $1.9 billion.
And yet investors shrugged off this further confirmation that retail investors are heading for the exits (much of the money is ending up in industry funds).
AMP reported net outflows during the first half of $3.1 billion, similar to what it reported in the second half of 2018 on the back of the Hayne royal commission revelations.
AMP’s wealth management unit had cash outflow of $9 billion during the September quarter while cash inflow was $7.1 billion. Total assets under management grew to $133 billion.
But surprisingly this lack of confidence doesn’t extent to AMP Bank where $600 million flowed into the bank’s deposit base in the quarter (to a total of $14.5 billion) and the loan book rose by $100 million to $20.3 billion.
That tells a very different story about investor perceptions about differing parts of AMP and the reputations of both (and the fact that deposits in the bank are protected up to $250,000).
The company said $200 million of the outflows came as the result of the government’s new Protecting Your Super legislation, which saw fee caps introduced and the transfer of inactive low-balance accounts to the Australian Taxation Office.
AMP chief executive Francesco De Ferrari said its business units performed “broadly as expected” during the third quarter, an admission that met with market expectations
“Australian wealth management is taking significant steps to reinvent its business model, building a business around client needs,” he said.
“We have achieved stronger inflows during Q3, reflecting our improved fee competitiveness, but also higher outflows as the new Protecting Your Super legislation was implemented in Australia.”
