AMP's troubles escalated quickly: the 171-year-old Australian wealth manager may be broken up as part of a strategic review. What does that mean for its CEO of 20 months, banker Francesco De Ferrari?

The Sydney-based company's new Chair Debra Hazelton wasted little time since taking over last week: she has ordered a strategic review of AMP's business following a slew of damaging scandals, according to Australian daily «Financial Review» (behind paywall), which quoted from a statement to the stock exchange. Unit disposals or even the sale of the well-known bank in its entirety are on the cards.

The move is a blow to CEO Francesco De Ferrari, who joined less than two years ago in a recovery attempt following a major scandal. AMP, accused of misleading customers and lying to its regulator, was bleeding assets when the Swiss banker joined. De Ferrari previously ran Credit Suisse's wealth arm in Asia, which put him in the running for the top job that Iqbal Khan bagged in 2015.

Troubled Culture

The problems at AMP were accentuated by what emerged as a troubled culture at AMP, which raised the ire of its largest shareholders. The issue blew open after two unfortunate top management choices by de Ferrari (both were reversed – it also cost ex-UBS top executive John Fraser his AMP board role).

AMP illustrates how questions of culture as well as workplace diversity and ethics are becoming more central in finance. While De Ferrari isn't tied to AMP's past regulatory troubles, he has a lot at stake – including his job, depending on what happens with the wealth manager.  

Credit Suisse's Aid

The Swiss-Italian citizen is also due to testify before a parliamentary commission in Australia on culture and sexual harassment later this month, according to the «Sydney Morning Herald». Ironically, his former colleagues may hasten the end of his short-lived career in Australia: the Swiss bank was hired alongside Goldman Sachs to conduct the review. 

Its fund management unit, AMP Capital, is believed to be the most attractive asset in its stable. De Ferrari's grueling 20 months down under included having his three-year, A$17.7 million ($12.7 million) pay scheme docked, also under major criticism. He was able to reverse AMP's losses to a A$203 million profit in the first half and offload a life insurance unit.