Volatile financial markets dented assets under management at AMP in the first quarter of the year.

AMP, the Sydney-listed financial services group that includes wealth management, has reported total assets under management of A$112.6 billion ($82.6 billion), a fall of 2 per cent from the end of last year and 3 per cent below the first quarter of 2015.

The firm cited “challenging” market conditions in its results.

Australian wealth management net cashflows were A$209 million during the quarter, down from $342 million in Q1 2015. Cashflows were hit by weaker investor confidence, ongoing market volatility and advisors adjusting to an enhanced regulatory environment, it said in a statement. External inflows represented approximately half of total cash inflows, which were A$2.8 billion in Q1 2016, down 1 per cent on a year earlier.

"Domestic and global investment market conditions continued to be challenging during the first quarter, subduing cashflows across our business. Ongoing claims volatility continues to be a feature in Australian wealth protection," said AMP's chief executive, Craig Meller.

"Despite these challenges we remain confident in the overall long-term outlook for AMP," he added.

For the first quarter of 2016, the Australian wealth protection business was affected by claims losses of A$18 million, with the majority of the losses being in retail income protection across both incidence and termination, the firm said.