If there was ever a case study of how to destroy a brand then AMP would have to be in contention as one of the best examples to use in the financial services sector.

AMP is a brand which has been around for a century and a half and for the large majority of its existence it has done a good job for its customers. It had established itself as one of the enduring brands and was associated with prudence, conservatism and stability.

Today the brand has suffered major damage, particularly from the Australian Royal Commission; and more lately from botched attempts by its Australian parent company to jettison the New Zealand business. This week the deal to sell its life business to Resolution Life, all but fell over. Previous plans to IPO the wealth business and list it on the sharemarket was one of the whackiest ideas that we've seen for a while. It was no surprise to see the idea canned.

Where things started to go wrong is hard to pinpoint, but when it comes to destroying value the acquisition of AXA in New Zealand has to be a good starting point. One plus one did not equal three. 

The decision to sell the AMP Life business to Resolution Life and wind up the operations has turned into a shambles when we learnt this week that the Reserve Bank was unlikely to approve the deal as structured. It appears that the Reserve Bank made this clear to the parties when it first was presented with the idea in September last year. However, it wasn't until June 7 this year (nearly nine months later) until a formal proposal was put to the regulator.

The Reserve Bank says in September Resolution made initial contact with the bank, "following which we promptly made them aware of New Zealand regulatory requirements.

It's difficult to fathom how the two parties got this so badly wrong. AMP must have know what its licence allowed and Resolution is highly experienced with these types of transactions."

One would  have sensibly thought it made sense to involve the RBNZ at the beginning of the process not the end.

The Reserve Bank is clearly being more, let's say activist, in looking at deals in the life insurance sector. Part of this arguably stems back to the collapse of CBL and the Reserve Bank's role in regulating the sector. The question has to be asked whether the RBNZ is actually the appropriate body to be the regulator of the insurance sector?

I don't have an answer for the question, but it is one which should be asked.

The AMP/Resolution deal isn't the only one to have been red carded by the regulator recently. There was another one just over a month ago which we will report in on next week.

There are so many questions about the life business, following this week's news and the decision in January to stop writing new business. Here's some of the questions and ideas to ponder.

My guess is that the wealth business will be sold in parts. While AMP's KiwiSaver business is suffering from member outflow there are parties who may well be interested in picking it up. Its advice firm, Advice First, would be attractive to buyers in the new financial adviser landscape. Its focus is now on wealth, rather than risk, and all the advisers are salaried.

AMP's superannuation business, NZ Retirement Trust, is an interesting one. Good Returns understands Air New Zealand is one of the big clients and it is currently considering its future.

And of course there is the question around distribution - sort of the holy grail of financial services. AMP finally agreed to let its agents operate in, let's say, a less-tied manner.  These advisers will have a greater choice of products to use and it's a pretty good bet that AMP products won't be sitting at the top of the approved list.