New Zealand wealth management
New Zealand delivered a strong underlying performance despite increased competition in the sector. Excluding the impact of product revenues transferring with the sale of AMP Life, FY 19 operating earnings increased 7 per cent (including product revenues transferring, earnings decreased 17 per cent).
AUM increased A$1.2 billion to A$12.3 billion in FY 19, due to strong investment markets and continued cash inflows into KiwiSaver. Net cash outflows of A$433 million in FY 19 reflect regular pension payments, increased market competition, and the wind-up of two legacy products.

Divest New Zealand wealth management
o SignificantprogressonsimplificationofbusinessinFY19includingconsolidationof
product offerings and removal of a number of legacy products.
o Divestmentprocessunderwaywithmandatetomaximiseshareholdervalue.AMPisin
discussions with a number of interested parties and expects to provide a further update at or before 1H 20 results.

Operating earnings
Excluding the impact of product revenues transferring with the sale of AMP Life (A$12m), FY 19 operating earnings would have increased A$3m (7%) from FY 18 and remain resilient despite the industry headwinds of regulation and increased competition. The ongoing performance of the wealth management business, responsible for the manufacturing and sourcing business lines, has supported the positive FY 19 result.
Cashflows and AUM
FY 19 AUM of A$12.3b increased by A$1.2b (11%) from FY 18, largely due to stronger investment markets.
Net cash outflows of A$433m for FY 19 were impacted by cash withdrawals from retail investments, which were driven by a
mix of expected regular retirement withdrawals and increased competition. Cashflows include the impact of the pro-active windup of two legacy products resulting in A$94m cash outflows in 2H 19.
KiwiSaver generated net cash inflows of A$110m for FY 19, while net cash outflows on platforms and other investments amounted to A$543m.
New Zealand wealth management is a large KiwiSaver provider with approximately 9%1 of the NZ$62.0b KiwiSaver market as at 30 September 2019.

Advice network restructure
In FY 19 AMP restructured its New Zealand advice distribution network by re-contracting 281 advisers previously part of its AMP Financial Advice Network (AFAN) with standard IFA agreements. These advisers are now responsible for their own advice and compliance in preparation for the new financial advice legislation that is expected to come into force in New Zealand on 29 June 2020. New Zealand wealth management does not expect this to materially affect AUM it manages in connection with these advisers.
Resolution Life transaction impacts
As outlined on page 1, Resolution Life assumes the risks and is entitled to profit impacts from the AMP Life sale with effect from 1 July 2018. Operating earnings for FY 18 included A$12m (post-tax) which will
be attributed for the benefit of Resolution Life when the transaction settles. This is primarily due to product perimeter changes between the retained New Zealand wealth management business and the sold New Zealand wealth protection and mature businesses.

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In August 2019, AMP Group indicated it is exploring divestment of AMP Wealth Management New Zealand (our business), including our majority owned subsidiary AdviceFirst. This would enable our business to pursue further growth opportunities in the local market as we continue to improve our product and service offering for our clients locally.
We have a strong and dedicated team with a track record of quality execution, which positions our business for this logical next step as we continue to respond to the demands of the changing market and regulatory landscape to build a sustainable business. We continue to be a profitable and highly capital efficient business.

These results reflect a strong performance despite increased  regulation and competition across our industry.

AMP Wealth Management New Zealand is New Zealand’s leading non-bank retirement solutions provider, with
AMP KiwiSaver Scheme and Corporate Superannuation (New Zealand Retirement Trust) assets under management of $9.4b. Assets under management of $12.8b increased by $1.0b (8.9%) largely due to stronger investment markets.
Net cash outflows of $457.1m were a result of cash withdrawals from retail investments (a mix of expected regular retirement withdrawals and increased competition). The AMP KiwiSaver Scheme generated net cash inflows of $115.7m. Cashflows include the impact of the proactive windup of two legacy products, resulting in circa $99.0m cash outflows.
Controllable costs of $35.3m were in-line with the prior period due to tight expense management and sustainable cost out.

Through the re-contracting of our independent financial advisers, as part of the renovation of our distribution channels, we remain focused on further simplifying and growing our advice proposition, including through the provision of access to high-quality advice and services to improve outcomes for clients.
The localisation of information technology services and the creation of a state-of-the-art technology platform has delivered and will continue to deliver an enhanced digital experience for our clients to help them take control of their savings, including through new functionality and regular updates implemented through our My AMP app and portal.