Superannuation giant AMP is set to launch a new self-managed superannuation fund services range as it expands into the SMSF sector.
The company is attempting to diversity away from their traditional retail funds and are targeting wealthy investors with super accounts of over $1 million.
Chief executive of the SMSF Professionals Association of Australia Andrea Slattery told SmartCompany SPAA support initiatives such as AMP’s.
“Any new initiative where there are people developing new efficient services through engagement and raising their own competencies are initiatives I would encourage.
“Part of being in an SMSF is that you’re more engaged and your provider is more engaged with you, so you can make more informed decisions,” she says.
The new service is said to allow customers to electronically establish an SMSF, transfer an existing SMSF, draw a pension, access term deposits from 24 financial institutions and automatically re-balance their fund’s asset allocations.
Likely to please SMSF holders, AMP will also contact clients as they approach their contribution cap limits, helping them to avoid a clash with the Australian Taxation Office.
AMP SMSF clients will also be able to access AMP’s other services such as tax, technical and investment advice.
These new services, Slattery says, will enable providers to better help SMSF holders and ensure they are properly educated.
“These services encourage people who are providing services to the SMSF sector to continue to strive toward excellence in the efficiency and the competency of that deliver.
“It is the right of every member and trustee of an SMSF to have information and advice to help them make informed decisions and this new opportunity provided to the market will only improve the sector,” she says.
AMP chief executive Craig Dunn says tapping into the booming sector is critical to the company’s future profitability and growth.
“This area is attractive to us not only because it’s the fastest growing superannuation sector but because, through the use of technology, we can deliver an improved experience to the end client and deliver good returns to our shareholders,” he told The Australian Financial Review.
Dunn says this new technology will allow customers to receive better services.
“Technology will help us deliver a better direct service to consumers at different price points and it will also underpin the productivity of our advisors,” he says.
Dunn said the AMP SMSF administrative sector had grown four times faster than the market since its inception through organic growth and the acquisition of administrator Cavendish Group.
AMP is the largest player in the SMSF administrative segment with over 3% of the market, following the Cavendish deal.
Slattery says this fragmentation of the industry is a good thing.
“The beauty of the SMSF market is its diversity and its ability to grow organically because SMSFs are about individuals and about you being at the centre of the informed decision by the trustees for your retirement.
SPAA and Vanguard research indicated 74% of SMSF holders were extraordinarily happy with their fund because they had “specialist trust advisors, services and products which are easy and non-complex and meet their needs”, Slattery says.
AMP’s expansion in the sector comes as industry leaders are urging the government not to make changes to SMSF taxation.
“SPAA has been an advocate for a bipartisan commitment between both sides of the government for long-term planning for superannuation as the primary saving vehicle. We don’t want short-term arrangements which detrimentally affect confidence in super,” she says.