AMP has decided to retain the New Zealand wealth management unit and also its specialist advice business AdviceFirst

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AMP building in Napier, New Zealand. (Credit: The.Rohit/Wikimedia Commons)

AMP has scrapped plans to sell its New Zealand wealth management business owing to the economic and financial markets disruption resulting from the Covid-19 crisis.

The Australian financial services company said that it will retain the New Zealand wealth management unit and its specialist advice business AdviceFirst.

The company will now focus on plans on developing and growing the wealth management business in its existing markets. The plans include continuing the ongoing renovation and simplification of the unit’s products.

AMP revealed that it had discussions with various interested parties pertaining to the sale of the business. However, the offers it received were not in line with its expectations, said the Australian financial services group.

The group expects to give a further update on its New Zealand wealth management unit during the 1H 20 results, which are slated to be released in August 2020.

The AMP business in New Zealand calls itself to be a locally operated specialist wealth manager and general insurance provider, which helps New Zealanders to save for their future through products such as the AMP KiwiSaver Scheme and NZRT.

Recent performance of the AMP New Zealand wealth management business

Last month, the group reported that its New Zealand wealth management unit’s average assets under management (AUM) moved up 1.2% to AUD12.1bn ($7.9bn) in the first quarter of 2020 compared to Q1 2019.

The AUM of the New Zealand business, as of 31 March 2020 dropped by 9.8% to AUD11.1bn ($7.25bn) due to weaker investment markets. The unit’s net cash outflows were largely stable at AUD56m ($36.58m) compared to A$52m ($33.97m) net cash outflows in Q1 19.

According to AMP, its New Zealand wealth management unit’s KiwiSaver scheme had cash inflows of AUD163m ($106.47m) in Q1 20 compared to the AUD162m ($105.82m) cash inflows in Q1 19.

AMP New Zealand chief executive Blair Vernon said: “AMP Wealth Management is a strong, well-capitalised business, and remains focused on serving clients at a time when for all New Zealanders it’s clear that it’s even more important than ever to have access to high-quality products, services and advice that will make a significant difference in their lives and their long-term retirement outcomes.”