SYDNEY (Reuters) - Australia's largest listed wealth manager AMP Ltd said proposed new laws aimed at protecting investors' retirement savings would hit its earnings by about A$30 million ($21.45 million) per year, sending its shares to an all time low.
This underlines the challenges the firm faces as it is also haemorrhaging funds after a public inquiry into the financial sector heard it had engaged in conduct such as charging fees for no service and attempting to deceive regulators.
The proposed laws, if passed, would dent AMP's earnings in the current financial year by about A$10 million after tax, and by up to A$30 million annually from 2020, the company said.
The bill, which needs to be approved by parliamentarians, would ban the charging of so called "exit fees" to customers who want to change retirement funds, locally called superannuation.
The new law would also require the transfer of all low-balance accounts to the Australian Taxation Office (ATO).
AMP said its flagship wealth management unit would be hit the hardest if the legislation is passed as it would have to transfer about 370,000 low-balance superannuation accounts.
Shares of AMP fell to an all-time low of A$2.12, while the broader market was slightly higher.
"This is just one of the issues facing AMP," Morningstar analyst Chanaka Gunaseker said. "People recognise it will take several years for them to turn things around."
The 170-year company, which is struggling to rebuild its image in the wake of damaging revelations at the inquiry, said its estimates excluded measures such as actions to retain customers and administrative cost efficiencies.
Earlier this month, the wealth manager pointed out that its regulatory and compliance costs were mounting and would affect earnings this year.
(Reporting by Paulina Duran in Sydney; Additional reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Sandra Maler and Himani Sarkar)
