Public trust in AMP plummets
Advertisement

Public trust in AMP plummets

Bendigo Bank is the only bank brand to defy the fallout from the banking royal commission. It has managed to remain in the top-10 most trusted brands, despite high levels of distrust in the banking sector.

On the other hand, AMP, which has featured prominently in evidence before the banking royal commission has been affected badly by how consumers' view the wealth manager. It has a heavily negative 'net trust score' - which is the trust score minus the distrust score.

AMP's appearance before the royal commission in April included admissions it had misled customers and the regulator and had charged some of its superannuation customers fees for no service, as had the four big banks.

AMP conceded it had made false statements to the Australian Securities and Investments Commission and senior staff ignored legal advice that charging of customers for services they did not receive may have been unlawful.

Senior counsel assisting the royal commission Rowena Orr, QC, argued that the royal commission should recommend AMP face criminal charges when the commission delivers its recommendations.

Advertisement

Since October last year, market research firm Roy Morgan has surveyed thousands of people to nominate brands they trust and brands they distrust.

Loading

The first trust survey was conducted in October 2017 and the others in January, February, April and July of this year.

ALDI, Bunnings and Qantas have remained in the top-five most trusted brands across all surveys since October 2017.

Bendigo Bank, however, has improved its trust levels and was the third-most trusted Australian brand in the July survey, rising four places from earlier in the year.

The big four banks have remained among the top-10 least-trusted brands since the survey series began.

AMP has been the big mover. It used to have only a marginally negative trust score, but since April and, particularly, by July, its distrust level had "soared" says Michele Levine, the chief executive of Roy Morgan.

And the level of distrust is showing up in the performance of the wealth manager.

AMP's wealth management business saw total net cash outflows of $873 million for the first half of 2018, compared with net inflows of $1.023 billion in the prior corresponding half.

Most of those withdrawals were in the three months to June 30 with net outflows of $673 million.

AMP shareholder have copped it in the neck. Before the royal commission, AMP's share price was trading above $5. It is now trading below $3.50.

AMP's dealing with the royal commission is not over.  The wealth manager is scheduled to be grilled about its life insurance products during the commission's insurance session that runs for two weeks from September 10.

AMP and its new chief executive officer, Francesco De Ferrari, are fully aware of the size of the challenge to restore trust in the 169-year-old company.

An AMP internal report said that its public reputation has fallen "significantly" behind comparable companies, including the big four banks.