The AMP Ltd (ASX: AMP) share price fell 3.5% in May — a slightly more painful decline than the 3% drop we saw with the S&P/ASX 200 Index (ASX: XJO) over the month.
It hasn't been a positive year for the wealth management company in 2023 to date – it's down by 13% following the hefty drop in February, as we can see on the chart below.
The ASX financial share didn't release any market-sensitive news in May, but there were a couple of pieces of news that might have had an impact on the AMP share price.
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ASIC proceedings concluded
First up, AMP noted the Federal Court decision as part of ASIC civil penalty proceedings relating to the deduction and retention of life insurance premiums and advice service fees from the superannuation accounts of deceased customers.
The Federal Court ordered that AMP Life and AMP Financial Planning be penalised A$24 million. AMP remediated 10,155 customer accounts approximately A$5.2 million in total, for the period from 2011 to 2019. This included compensation for lost earnings. The remediation was completed in May 2022.
This penalty has already been fully provisioned by AMP in its financial statements for the year to 31 December 2022, according to the company.
Many of these sorts of issues caused the started the decline of the AMP share price five years ago.
Simplified structure
In other news, AMP announced it was making some executive changes to "simplify and streamline" its business.
AMP advised that chief financial officer Peter Fredricson was retiring. The roles of chief financial officer (CFO) and group executive transformation would be consolidated with Blair Vernon appointed to the expanded role.
The company said Vernon would be responsible for leading financial and strategic activities across "financial control, statutory and regulatory reporting, performance reporting, tax, investor relations, treasury, mergers and acquisitions, strategic resourcing and workplace experience and transformation". He will also lead the balance sheet and cost base reviews announced in March 2023.
Vernon joined AMP in 2009 and was the chief executive of AMP Wealth Management in New Zealand in 2019.
A consolidated leadership role
The role of the chief executive of the Australian wealth management (AWM) division will be removed with a transition to a new operating model to occur by the end of the year. The AWM business will be dissolved.
The AMP chief executive Alexis George said about Vernon:
He is uniquely well-placed to take on the combined role of AMP CFO along with his existing role of Transformation, having played a major role in the simplification of the business. Blair has a strong track record of prudent financial management, delivering sustainable cost reduction, which together with his knowledge of the company will enable him to continue to drive the efficiency agenda.
A key focus for Blair will be delivering the capital management and cost base review, with that work already well advanced and on-track to be completed on or before our results update in August.
Foolish takeaway
It's likely the new simplified structure and leadership changes will influence the AMP share price in the months ahead.
Last month's RBA interest rate increase may also have impacted the AMP share price in May. It will be interesting to see what happens in June with increasing expectations of another interest rate hike.
