Diversified financial products group, AMP Limited (ASX: AMP) has today reported a net profit of $383m for the six months to June 2012, up 11% compared to the previous year. Underlying profit, which excludes merger costs and some of the impact of market volatility was up 9% to $491m.

Meanwhile the dividend has been cut slightly, down from 14 cents in the last half of 2011 to 12.5 cents in 2012 mainly due to ongoing investment market volatility and the continued growth in demand for more capital intensive products. In other words, AMP is holding back some funds, should tough times continue or deteriorate further.

AMP’s merger with AXA certainly contributed to the upbeat profit and the company expects integration to be complete six months earlier than planned. An expected $150 million of cost savings are now being targeted – partly reflected in the lower costs which have fallen from 50.6% to 46.2%. The company expects costs to be down 2 or 3% for the full 2012 financial year.

The growth of Australia’s superannuation system continues to benefit AMP, with the company increasing its assets under management (AUM) for its low cost retail superannuation and retirement product, AMP Flexible Super, with AUM growing by $2.8 billion to $5.7 billion.

AMP’s Capital division has also increased total AUM to $123.2 billion, with investment performance offsetting net outflows.

The company continues to increase the number of its financial advisers, with 147 net new planners joining during the half. AMP now has 3,574 financial planners.

Meanwhile, consolidation in the wealth management space also continues with smaller rival IOOF Holdings  (ASX: IOF) making a friendly takeover offer for Plan B Limited (ASX: PLB). Clearview Wealth (ASX: CVW) is apparently being circled by potential suitors, after rejecting a $220m offer by private equity manager Crescent Capital Partners Management.

The introduction of the Federal government’s Future of Financial Advice reforms means many smaller licencees will have difficulty meeting the cost of the new compliance rules and the administration costs of running the business, hence the continued consolidation.

The Foolish bottom line

The carrot on the end of the stick is the increase in employee super contributions from the current 9% to 12% over the next few years, which is likely to result in a massive inflow of funds into superannuation, and a proportionate jump in fees for advising and managing on those funds. As the largest wealth manager in Australia, AMP looks well placed.

If you’re in the market for some high yielding ASX shares, look no further than our ”Secure Your Future with 3 Rock-Solid Dividend Stocks” report. In this free report, we’ve put together our best ideas for investors who are looking for solid companies with high dividends and good growth potential. Click here now to find out the names of our three favourite income ideas. But hurry – the report is free for only a limited time.

More reading

Motley Fool writer/analyst Mike King doesn’t own shares in any companies mentioned. The Motley Fool‘s purpose is to help the world invest, better. Take Stock is The Motley Fool’s free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it’s still available. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

OUR #1 DIVIDEND PICK FOR 2016...

Forget BHP and Woolworths. This "dirt cheap" company is growing like gangbusters, and trading on a 5.6% dividend yield, FULLY FRANKED (8% gross). With interest rates set to stay at these low levels for years to come, for hungry investors, including SMSFs, this ASX company could be the "holy grail" of dividend plays for 2016.

Enter your email below to discover the name, code and a full investment analysis in our brand-new FREE report, “The Motley Fool’s Top Dividend Stock for 2016.”

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our https://www.fool.com.au/financial-services-guide">Financial Services Guide (FSG) for more information.