Why debt and cash flow?

Clients with an AMP home loan have 4 x AUM and 2.5 x API compared to the average AMP client.

Quality debt and cash flow advice significantly improves client retention and is the key that opens the door to a customers’ whole financial world.

‘If I have built enough value add about my solution in debt it is truly a formality that they are going to deal with me for the super/risk side of things’

Adviser

1 in 5 home loan holders take out new loans in any one year.

That’s 600,000 home loan transactions per year.

For an AMC who settles 1 home loan per week/4 per month/48 per year:

Upfront revenue of
$100,800

Trail of
$28,560
in year 2

Based on an average home loan of $350,000

Customers want help with debt and cash flow

Property is front of mind

‘I don’t have a concept of saving as long as I have a mortgage.’

Customer

Customers’ top priorities largely relate back to debt and cash flow.

  1. Paying off the home loan
  2. Cash flow and lifestyle management
  3. Saving for children’s education
  4. New wealth accumulation opportunities
  5. Getting control of and optimising super

‘Approximately 44 per cent of retirees who take a lump sum use it to pay off housing and other debts, to purchase a home, or make home improvements.’

Rothman, G and Wang, H 2013, ‘Retirement income decisions: Take up and use of Australian lump sums and income streams’

‘Debt is money owed. Debt is a restriction. I want to pay back as quickly as possible.’

Customer

‘We don’t like owing. We have mortgage stress. I’d have sleepless nights thinking about the interest we are paying.’

Customer

What tools and solutions are available to help me start talking debt and cash flow?

In 2014, 600 advisers attended debt education sessions learning how they could better support customers.

93% of workshop attendees were satisfied or very satisfied with the debt education program, support and tools.

‘It’s at the front of most people’s minds so it’s a service that our clients cannot do without.’

Workshop attendee

‘Enables us to look at the full spectrum of advice across all areas and not limit those discussions to risk, superannuation and investment.’

Workshop attendee

In 2014, AMP launched the Debt Master Class, which focuses on giving advisers the knowledge and skills to have debt and cash flow conversations with their clients, as well as how to package and price this advice.

‘I am really confident now because I know that I can deliver value and give my customers something they want. I am not “reaching” during the annual review.’

Workshop attendee