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AMP has announced lower profit expectations to the market, and released its royal commission damage control plan.
The troubled wealth management firm is expecting to report an underlying first-half profit of between $489 million-$500 million in early-August.
That is a step down from its previous underlying first-half profit (2017) of $533 million.
It will also take steps to “reset the business“, and will put aside a $290 million fund for “potential advice remediation”.
Essentially, the company will review whether the financial advice it provided in the last decade was appropriate.
“The company is moving to accelerate its remediation program to ensure all impacted customers are appropriately compensated,” AMP said in a statement.
The company’s acting chief executive Mike Wilkins said: “Our remediation provision responds to industry-wide issues raised by ASIC in its reports 499 and 515 and reflects a conscious business response to increased community expectations.
“This remediation program is complex as it will address both employed and aligned advisers, and we understand it is one of the first programs to do so.”
In addition, AMP will spend $70 million over the next two years to upgrade its risk management controls, and strengthen its compliance systems.
The company will also cut fees for its flagship MySuper products, which is expected to affect 700,000 superannuation customers.
AMP also warned investors that the interim dividend they receive may be lower than expected.
Topics: banking, business-economics-and-finance, company-news, regulation, superannuation, australia
