New AMP chief admits serious mistakes were made at the embattled wealth manager

New AMP chief admits serious mistakes were made at the embattled wealth manager | Insurance Business

New AMP chief admits serious mistakes were made at the embattled wealth manager

Francesco De Ferrari has recently taken the challenging task of rebuilding the shattered reputation of Australia’s largest wealth manager, as the financial services industry awaits the final report from the Hayne royal commission, due in February.

The new AMP chief executive said he is taking a “glass half-full” attitude in confronting the AMP crisis, and while he acknowledged that serious mistakes were made at the company, he also stressed the need to address systemic issues across the entire sector.

"Clearly we have learned a lot of very hard lessons this year," De Ferrari said in an interview with ABC’s AM program. "We need to take the corrective action to restore the trust in all the various stakeholders. Organisations are comprised of human beings. Human beings make mistakes. I don't think I've seen an organisation that hasn't made mistakes. The question is how quickly the organisation realises the mistakes and fixes them."

The ex-Credit Suisse banker said the royal commission exposed serious failings not just at the wealth manager but also across the financial services sector.

"Clearly these are widespread systemic issues,” De Ferrari told AM. “I think the financial industry needs to be realistic about these issues and address them appropriately. I think the royal commission offers the financial industry the opportunity to ask some of the tough questions and drive an impetus for change which otherwise would have not been there."

De Ferrari didn’t draw a concrete timeframe for restoring community and investor trust in AMP, saying he first needs “to meet as many customers, employees, agents… [and] the regulator… to get input on what they feel is right and wrong and where they would see the company heading.”

The new AMP boss also expressed his support of the controversial $3.3bn sale of AMP’s life insurance arm, announced by acting chief executive Mike Wilkins in the lead up to his official start at AMP.

"From a strategic point of view, the resolution deal absolutely makes sense," De Ferrari told AM. He said that “global scale” was required to compete in the insurance market, and that “a single country-focused monoline of insurance simply cannot compete with a lower cost of capital of the global players. It would have been a business which would have continued to underperform, and that is not in the best interests of shareholders."