While the analyst praised AMP’s ambitions to transform its advice business from a product-led distribution business to a holistic advice-led business focused on clients, he warned that the strategy won’t be an easy one to execute.

“Being advice-led means tailoring solutions to a client’s problem, not selling a client a product. Being holistic means providing whole of wealth solutions, not just the most suitable superannuation or investment product,” Mr Gunasekera said.

“For the average Australian, superannuation is not their largest asset, most of an average Australian’s wealth is from bricks and mortar assets including their homes. The most important advice for these customers is how to deal with their mortgage.”

AMP’s broader transformation strategy looks to more closely integrate AMP Bank and its Australian wealth management business and provide cross-selling opportunities.

However, Morningstar warned that the major banks have also tried a similar strategy and failed.

Cross-selling, or ‘share of wallet’, was an important strategy for the big four banks when it came to retaining customers. However, the practice of selling more than one product to consumers has been less successful than many believe. Cross-selling was also heavily criticised by the Hayne royal commission.

A 2018 report into the practice of cross-selling by Roy Morgan found that most major banks have seen their ‘share of customer wallet’ declining over the past four years, with NAB slipping 3.7 percentage points to 29.5 per cent, CBA losing 2.6 percentage points to sit at 31 per cent share of wallet, ANZ Group sliding 1.1 percentage points to 27.7 per cent and Westpac down 0.9 percentage points to 28.3 per cent.

“While there is no doubt the royal commission has exposed serious problems in the selling practices of banks, the share of wallet trend highlights increased competition across a number of product categories, with the Reserve Bank recently noting that overseas bank offerings, especially from Asian banks, plus the rise of ‘fintech’ operators, is continuing this trend,” the report noted.

However, the big-four banks have managed to maintain a larger share of their customers’ total number of financial products. CBA on average provides three out of 8.2 products held by each customer; ANZ provides 2.8 out of 9.6 products; NAB provides 2.7 out of 9.8; and Westpac provides three out of 9.6.