* AMP promotes new recruit boss to head of wealth management
* Former wealth management head testified at embarrassing inquiry
* AMP also hit by data breach by Chinese national (Adds AMP shares, data breach)
By Byron Kaye
SYDNEY, Feb 7 (Reuters) - Australian financial planning giant AMP Ltd AMP.AX replaced its wealth management boss on Thursday, as its new CEO puts a broom through its leadership after a public inquiry exposed serious compliance failures.
AMP was the worst hit by the Royal Commission inquiory into finance sector misconduct, losing its CEO, chairwoman, house lawyer and several directors over its handling of a "fees for no service" scandal. The inquiry's final report, published Monday, recommended referring 24 cases for possible prosecution, likely including AMP. inquiry also called for changes to the wealth management business model in general, including widening the scope of an existing ban on some of the undisclosed fees financial planners receive.
The removal of Paul Sainsbury - who admitted at the inquiry AMP had taken life insurance premiums from 4,600 dead people - shows CEO Francesco De Ferrari (NYSE:RACE) plans to move quickly on from the worst period in the company's 170-year history.
De Ferrari, a former Credit Suisse (SIX:CSGN) Asia head who started at AMP on Dec. 3, said he had promoted another former Credit Suisse Asia boss, Alex Wade, to be AMP's new head of wealth management. De Ferrari brought Wade over from Credit Suisse a month ago.
"2019 will be a year of significant transition for AMP, and today's appointments will drive change while retaining experience in our leadership team," De Ferrari said in a statement.
"I am confident that, under Alex Wade's leadership, we will be able to reinvent our wealth management business to better compete in the new regulatory environment."
Sainsbury did not respond to a Reuters request for comment. An AMP spokeswoman declined to comment when asked if Sainsbury's removal was related to the Royal Commission.
DATA BREACH
AMP meanwhile found itself at the centre of a data breach, with a Chinese AMP contractor pleading guilty on Thursday to downloading confidential documents of 20 customers and sending them to his personal email address. He was arrested on Jan.17 trying to board a flight to China.
The man, Yi Zheng, 28, will be sentenced on March 21, a court spokesman said.
The breach involved a small amount of customer information and there was no evidence the data was further compromised, the AMP spokeswoman said.
AMP reported a rise in clients withdrawing money in the wake of the Royal Commission's revelations. Last month it said it would cut its final dividend by almost three-quarters and post a meagre annual profit for 2018.
AMP reports results on Feb. 14.