MENU

AMP Limited flags $290 million cost from Royal Commission caning

Shares in troubled financial advice and asset management business AMP Limited (ASX: AMP) hit a new 52-week low this morning after the group flagged a $290 million cost for “potential advice remediation” to make good the problems across its financial advice business.

It’s the fallout from the Royal Commission’s insights into some of the dodgy financial advice practices at AMP that has induced the provision as AMP reports it is now required by ASIC to take part in an ‘industry wide’ look back of “advice provided from 1 July 2008 and 1 January 2009, respectively”.

AMP will also take another $55 million in post tax one off costs over the first half it reports – the costs are related to inter alia, the Royal Commission and other remediation or review policies.

Aside from the $345 million in provisions, AMP now expects to report an underlying profit between $490 million to $500 million for the six-month period ending June 2018. The group’s ‘wealth protection’ or life insurance style business is also continuining to struggle, with it expecting to report “negligible operating earnings” over the period as a result of “negative experience and capitalised losses”.

Selling insurance products that sit under the ‘life’ and ‘general’ insurance umbrella has been a tough business for a long time in Australia as consumers demand more and become more likely to let policies lapse that they don’t feel provide value.

The Disruptors: 3 Revolutionary Aussie Companies to Back for 2018

We’re living in one of the most exciting times in investing history. Innovation and a booming culture of entrepreneurship are constantly creating new companies with the potential to make forward-thinking investors very rich. Now more than ever, one small, smart investment could make a huge difference to your wealth.

That’s why at The Motley Fool we’ve been scrutinizing the ASX to uncover the kinds of companies that we believe could turn into the next Atlassian.

We’ve found three exciting companies that we believe re poised to perform in the new year. Click here to uncover these ideas!

Motley Fool contributor Tom Richardson has no financial interest in any company mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…

Including:

The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!