Today, AMP limited’s [ASX:AMP] share price is up 3.52%, trading at $3.50 at the time of writing.
AMP gave an update on its expected interim results and announced the actions being taken in order to reset business, prioritise customers, as well as build up management systems controls.
How has AMP Limited’s share price been affected by media release?
Commenting on the action needed to reset AMP’s business, Acting CEO Mike Wilkins said:
‘Today’s announcement reflects our commitment to take decisive action to reset AMp and establish a platform from which the business can recover rapidly. We’re facing squarely into the issues that have impacted our reputation and the community’s confidence in AMP.’
This comes after issues raised by ASIC about increased community expectations. And AMP has since detailed a review of advice and fees charged across its entire advice network including aligned adviser base.
What AMP’s media release means for shareholders
Mr. Wilkinson stated that customers’ needs are AMP’s main priority moving forward and that this would ‘best serve the long-term interests of shareholders.’
AMP has also announced that its 1H 18 profit will be attributable to shareholders, and is expected to include a provision of AUD$290 million after tax, for potential advice remediation.
While the program is estimated to cost around AUD$50 million after tax annually over the three years, investors should note that this cost will be expensed as it occurs.
AMP is actively pursuing a number of potential recovery options in order to help offset the remediation costs in medium term. Further updates on delivery and costs of the program will be announced at a later date in future financial reporting periods.
For Money Morning
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