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AMP amplifies advice message

Now the £75m takeover of Towry Law is in place, AMP is finally hoping to lay the ghosts of pension misselling to rest and build AMP as a strong advice-led brand in the UK.

UK managing director Tom Fraser, still less than a year into the job after joining from Norwich Union, has spent millions since taking over the helm. Buying personal finance website Interactive Investor International for £52m in July came hot on the heels of the Towry deal.

With the spending spree over, Fraser has to get his business plan in action and turn AMP in to a “best of breed” provider. But he has some work to do in redressing industry fears that the AMP/Towry deal epitomises the end of the IFA among the firm&#39s plans.

Fraser says: “The Towry deal was good for the industry in a number of ways. Without it, there were a number of customers with an uncertain future.

“Towry has not made the most friends in the industry and there is no doubt the firm was not in the healthiest state. But as a stand-alone company it has a good business model and gives us an entr…e to a market we were not in before.”

Fraser&#39s admission depolarisation would have been the “icing on the cake” for the Towry deal did not make him too many friends either. But AMP insists Towry will run as a “strategically tied but operationally independent business”.

Although it admits Towry would have multi-tied with AMP if they had been introduced but Fraser says AMP would still have had to provide the right products at the right prices.

AMP products are not on Towry&#39s “best of breed” panel, but this does not seem to concern Fraser, who says: “AMP has one or two best of breed products, such as our socially responsible investment product, but the rest probably are not.”

Fraser says AMP will have a product shake-up as he is not prepared to manufacture products that are not profitable and that will not make AMP “better than best”. Products and systems not good enough will be outsourced. Fraser says: “If we cannot manufacture products profitably, we will outsource it. It is more important to give the customer the right product, which is currently not always AMP.

“I am not prepared to write unprofitable business. There are a number of things we do well and a number of things we should not do, around product manufacturing and systems. We should be using other

people to do it.”

The AMP stable already includes Pearl, NPI, London Life and Henderson Global Investors. With a customer base of five million across

all spectrums of society, Fraser says AMP&#39s strategy is to be a “farmer rather than hunter”. He says: “We do not need to chase new customers, we just need to make sure the ones we do have are serviced better.”

AMP was building its own online fund supermarket Ample but bought iii to get transactional and content ability up and running quickly. Exactly how the services will be brought together has yet to be resolved but AMP

is considering looking at an Ample/iii offering for the

IFA market and for Pearl&#39s direct salesforce.

By the end of the year, the brands will be renamed AMP Pearl, AMP NPI and AMP

London Life. Towry and Henderson will keep their names.

A complete disappearance of the brands has not been ruled out although Fraser says this is unlikely.

Pearl&#39s 2,000-strong direct salesforce is still on the road after many competitors have pulled out of this costly distribution method.

Fraser wants the salesforce to become more like financial planners and is aiming to improve the technical knowledge and skills to make the staff

better qualified to advise the public on all aspects of financial planning.

AMP says its strategy is focused on advice and customer relationships. Securing an IFA company and running an effective direct salesforce are part of this strategy to ensure that customers have access to advice.

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