Despite being a growing reservoir of funds under management, this critically important pool of capital is confronting mounting problems collating and disseminating key data in a timely manner.
The ratings house is pinning its growth strategy on a revamped methodology that increases the emphasis on governance to 25 per cent – a timely move considering APRA’s proposed reforms.
Retirement funds get choice makeover at AMP
(pictured: Therese Singleton)
AMP is moving to a broader fund platform approach in its two key retirement savings products on offer to the New Zealand market. AMP is the biggest provider of investment products to NZ financial planners.
Therese Singleton, general manager AMP Services, said the Australasian financial services conglomerate would add a further 16 fund choices to the existing 11 on the KiwiSaver and nine more to the 18 current NZ Retirement Trust (NZRT) product list.
Collectively, the two products have more than NZ$6.5 billion under management, with just over NZ$4 billion in the KiwiSaver scheme and the remainder in the employer super master trust, NZRT.
Singleton said the new funds would come from external providers – ANZ, ASB, Fisher Funds and Nikko – with sister firm AMP Capital Investors also expanding its offering.
While the ANZ, Fisher and Nikko balanced funds were already available on both the AMP KiwiSaver and NZRT, she said the new range would cover a wider range of risk profiles.
However, ASB was a fresh manager in the stable, Singleton said, primarily to introduce a choice of passive funds.
She said AMP was happy to provide competitor investment products on the KiwiSaver scheme to maintain member loyalty.
“KiwiSaver is more than about investments,” Singleton said. “It’s also about the wider administrative service – for example, the life insurance product we have been offering – funds management is just one part of that.”
As well as the existing pool of AMP Capital funds – which include a balanced fund and seven single sector products (already in the NZRT but now to also be offered in the KiwiSaver product) – AMP would add three new types of funds from its sister firm to the KiwiSaver scheme and NZRT.
“Were going to have a responsible investment fund and two goals-based AMP Capital products – the Multi-Asset fund and the Income Generator,” Singleton said.
She said the changes were driven primarily by AMP’s decision to expand fund offerings for KiwiSaver investors, with NZRT members also picking up the benefits.
“We wanted to give more choice to sophisticated KiwiSaver investors,” Singleton said. “We couldn’t legally put the funds in a wrap structure but this is like an investment platform.”
The wider fund choice should appeal to “DIY investors”, she said.
According to Singleton, KiwiSaver members enrolling directly in the scheme would likely face a tiered filtering process on the AMP website with those wanting to outsource all decisions directed to the group’s ‘Lifesteps’ program (an age-based automatic asset allocation adjustment service).
Alternatively, those wanting to make limited investment decisions could select the traditional balanced fund approach while more sophisticated investors would progress to the full fund choice, she said.
Direct investors would essentially be “unadvised”, Singleton said.
AMP-associated authorised financial advisers as well as its qualifying financial entity (QFE) network of advisers would be trained in the new range of funds.
The NZRT would also include a new “sharply-priced” UK qualifying registered overseas pension scheme (QROPS) option, Singleton said.
She said the incoming Financial Markets Conduct Act (FMC) has opened up opportunities for a “top tier” QROPS provider to enter the market.
Both the NZRT and AMP KiwiSaver changes were due to be introduced near the end of July.
– David Chaplin, Investment News NZ
