The fallout from the royal commission and remediation costs for charging its clients fees for no service have all but wiped out AMP's already-soft profit for the 2018 financial year. AMP's reported A$28 million profit for FY18 represented a drop of 97 per cent from the $848 million FY17 result, and has spurred its CEO Francesco De Ferrari to move ahead with a simplified business model. He expected AMP Bank to become a more important business unit within the group.The FY18 results unveiled yesterday showed the diversified financial services company was able to scrape into the black, after an almost half-billion dollar hit to earnings over 'fees for no service' remediation costs. The accounts also showed an estimated A$32 million in costs arising from AMP's appearances at the Hayne royal commission.Against the run of play, AMP Bank was one of the few businesses to show itself to be an above-average operation.Fronting media and analysts yesterday to outline AMP's sorry state of affairs yesterday, the group's new chief executive officer Francesco De Ferrari, and Gordon Lefevre, AMP's chief financial officer, laid out an ambitious plan to refocus the group, starting with the sale of its now non-core insurance businesses."With this very painful but transformational transaction will change [the structure of AMP] to become a more 'capital light' wealth banking and investment management based, performance focused organisation," De Ferrari said.Following the completion of this deal, AMP will be left with four core operating businesses: two wealth management businesses - one in Australia, and one in New Zealand - along with AMP Bank and fund manager AMP Capital.The group's Australian wealth business is already feeling the hit to its earnings from a range of factors, including greater competition and the need to move customers into MySuper products. The challenge for AMP, as De Ferrari noted, "is to reinvent itself as an advice led wealth manager [given] that question marks are raised over the affordability of such advice"."The model of advice delivery requires a major rethink," he said during a presentation to buy-side analysts and investors."With the proposed regulatory changes, traditional face-to-face advice will need to move upmarket. For the majority of the market, who cannot afford face-to-face advice the solution will need to be a technology-enabled tiered service offering."The CEO observed that simplifying the product or platform will give the company "a clear line of sight" to deal with a wave of regulatory change that he described as "the new normal" - hence the decision to include these costs will be above the line from now on. That is, the cost of regulation will always be recognised as an ongoing cost of doing business.AMP bank was one of the few highlights for the group. Growth in residential mortgages and a reduction in deposit costs drove a 5.7 per cent increase in operating earnings to A$148 million and a 15 per cent return on capital. Customer deposits grew by almost $1 billion while the residential mortgage book expanded by about $600 million, as growth