AMP Boston Consulting Group Matrix

Retirement income products are a key focus for AMP as it aims to become Australia's top retirement specialist. This strategy leverages the increasing superannuation assets, which reached over AUD 3.8 trillion by the end of 2023, and a rapidly ageing population. AMP's innovative offerings, such as MyNorth Lifetime, are attracting significant adviser attention and boosting the North platform's expansion, signalling a vibrant growth area where AMP is seeking to establish dominance.

Stars in the BCG Matrix represent offerings with high market share in a rapidly growing industry. AMP's Superannuation investment performance, with some MySuper options achieving over 15% returns by the close of 2024, places them in this category. This strong performance not only attracts new investors but also helps retain existing ones, contributing to AMP's overall market strength.

The broader Platforms business, excluding managed portfolios, demonstrated robust performance in FY24, achieving an underlying NPAT of $107 million. This represents a substantial 18.9% increase, highlighting the segment's strong growth trajectory.

This segment acts as a crucial anchor, not only facilitating high-growth products but also housing mature wrap platform services. These mature services are vital, consistently generating fee income from a substantial asset base, thereby solidifying their role as a reliable cash contributor.

AMP's legacy superannuation products, representing $56.4 billion in assets under management by the close of 2024, are a prime example of cash cows. Their consistent cash generation, despite slight margin dips, fuels other business areas.

The AMP Bank's mortgage portfolio, boasting strong credit quality, provides a stable revenue stream, bolstering AMP's financial health. Similarly, the Platforms business, with its mature wrap services, reliably generates fee income, acting as a dependable cash contributor.

AMP's retail investment management and its substantial $21.4 billion deposit base as of Q1 2024 for AMP Bank are also clear cash cows. These segments offer stable funding and consistent cash flow, underpinning operational stability and profitability.

AMP Bank's fixed-rate loan portfolios faced margin compression in FY24, impacting its net interest margin. This was largely driven by the shift of fixed-rate loans to variable rates, coupled with intense market competition.

These segments, especially if showing persistent margin compression or declining demand without significant digital uplift, could be classified as Dogs within the BCG Matrix.

For instance, if a specific portfolio's NIM fell below the bank's cost of capital and showed no clear path to improvement, it would fit the Dog category.

This classification highlights areas requiring strategic review, potentially leading to divestment or restructuring to improve overall portfolio health.

Dogs in the AMP BCG Matrix represent business segments or products with low market share and low growth potential. These are typically underperforming areas that consume resources without generating significant returns. AMP's sale of its financial advice licensee businesses in December 2024 exemplifies this classification, as these segments consistently reported losses and offered limited future growth prospects.

The divestment of these "Dog" segments is a strategic move to streamline AMP's portfolio and redirect capital towards more promising opportunities. By shedding these low-performing assets, AMP aims to improve overall profitability and operational efficiency. This focus on simplification and shedding underperforming units is a key strategy for enhancing financial performance.

Underperforming legacy products, such as older superannuation or investment offerings, often fit the Dog category due to their declining market share and lack of competitiveness. These products can contribute to negative cash flows and higher operational costs, similar to the issues seen with AMP's financial advice businesses prior to their sale.

AMP Bank's fixed-rate loan portfolios, particularly those experiencing persistent margin compression without a clear path to improvement, could also be classified as Dogs. Such segments require strategic review, often leading to divestment or restructuring to enhance the overall health of the company's asset base.

AMP's strategic pivot involves increasing its stake in direct infrastructure and private credit. This move targets areas with substantial growth potential, reflecting a deliberate expansion beyond traditional offerings.

Furthermore, AMP is actively acquiring direct property funds that are currently trading at attractive discounts. This opportunistic approach aims to leverage market inefficiencies for enhanced returns.

These new strategies, while promising high growth, represent developing market share for AMP. As of early 2024, AMP's penetration in direct infrastructure and private credit is still in its nascent stages, indicating they are prime candidates for the 'question mark' category within the BCG matrix.

The potential upside is significant, as AMP seeks to build its presence and expertise in these burgeoning asset classes. For instance, the global infrastructure market is projected to see significant investment in the coming years, offering a fertile ground for AMP's expansion.

Question Marks represent business ventures with low market share in high-growth industries. AMP's digital bank, AI assistant, and new infrastructure/private credit ventures exemplify this category. These initiatives require significant investment to capture market share, carrying a high risk but also the potential for substantial future returns if successful.

AMP's strategy involves carefully evaluating these Question Marks to determine whether to invest further to turn them into Stars or to divest if they do not gain sufficient traction. The success of these ventures hinges on AMP's ability to effectively navigate the competitive landscape and capitalize on market growth opportunities.

AMP's digital bank, launched in February 2025, targets a high-growth market with low initial penetration. Similarly, the AI assistant for advisers addresses an evolving market with nascent adoption rates. These are classic Question Marks, demanding strategic investment decisions.

AMP's expansion into direct infrastructure and private credit also falls under the Question Mark classification. These areas offer substantial growth potential, but AMP's current market share is developing, necessitating significant investment to build expertise and presence.