(Reuters) - Australia's AMP (OTC:AMLTF) Ltd said on Monday it would move to a new form of financial advice model for clients, marking a shift in the troubled wealth manager's advice operations as it embarks on a demerger from its infrastructure and property units.
The move comes after AMP decided in April to spin off its asset management arm's private markets business and focus on its wealth management units following U.S.-based Ares Management (NYSE:ARES) Corp's failed bid to buy the whole company.
Under the new model, AMP will introduce a fresh service and fee structure for its advisers and stop owning client relationships. It will instead release "institutional ownership from AMP Financial Planning to advisers", it said.
AMP will also conclude arrangements that allowed it to buy back client books from licensed financial planners from the end of this year, after the securities regulator began investigation into an alleged fees-for-no-service conduct by its financial planning unit.
"The new model releases institutional ownership. Buyback arrangements will also cease, with advisers having between now and the end of the year to make the decision to leave the network under their existing arrangements," said Matt Lawler, managing director of Advice at AMP.
The embattled wealth manager will phase in a new "service proposition and fee model for advice practices" for its clients between January 2022 and January 2023, it said.
(This story has corrected third paragraph to say AMP will introduce a new service and fee structure for advisers, not clients)