AMP has today announced fee reductions to MyNorth and other wrap offers as part of a commitment to competing strongly and transparently, while delivering a market leading offer for clients and their advisers.
AMP is introducing the new prices to counter the practice of some industry providers, who are offering advice licensee or advice practice rate cards to encourage financial advisers to use their platform. The use of these rate cards is distorting pricing and equity in super and pension wrap products, as not all financial advisers using the same platform can access the same prices for their clients.
AMP is calling for an end to the use of advice licensee and advice practice rate cards, so that there is better price transparency for financial advisers and investors, and greater equity.
As part of AMP’s commitment to delivering a market leading offer for clients and their financial advisers, it has introduced administration fee reductions of up to 22 per cent to its flagship MyNorth wrap offer, which came into effect on 1 May 2021. AMP’s North and Summit administration fees will also be reduced effective 1 June and 1 August 2021, respectively, and will broadly align with the new MyNorth fees.
The new pricing provides significant savings for existing and new superannuation, pension and investment clients and their families. There are more than 210,000 clients across the My North, North and Summit platforms, which is approximately 90 per cent of AMP’s platform clients.
The iAccess and Generations platforms will also be reviewed in the second half of the year. Clients and financial advisers will be provided details of the changes once they are confirmed.
Scott Hartley, Chief Executive Officer AMP Australia, said:
“The fee reductions we have announced across our platforms should be seen by clients and financial advisers as a signal of AMP’s intent to compete strongly and transparently across our wealth product range.
“These are highly competitive and transparent fees, which we have introduced as a response to the use of advice licensee or advice practice rate cards by many in the industry, which we see as distorting the system and creating member equity issues in the super and pension wrap products. We are not going to play that opaque game as it creates inequity for financial advisers and their clients and is arguably breaching legal obligations to treat members fairly.
“We are advocating for a more transparent approach to pricing across the industry. All financial advisers should have access to the same platform pricing from their chosen provider and not have to compete with selected advisers getting preferential deals.
“AMP is committed to providing market leading wrap offers for all financial advisers so they can efficiently and equitably deliver for all of their clients.
“Financial advisers and clients can expect AMP to take advantage of its substantial wealth management capabilities and continue to invest in our platform business creating whole of wealth solutions and more seamless administrative and technology experience.
“In the short term, we’re particularly focused on strengthening our managed portfolio range and innovative retirement offers, building on the recent launch of offers such as the MyNorth Sustainable Managed Portfolio and the new and improved MyNorth Guarantee.”
The new pricing includes:
- Reducing the administration fee on MyNorth’s Choice menu by up to 22 per cent for portfolio balances of $250,000 and over. This can see a super client with a $250,000 balance save $200 per year
- Reducing the administration fee cap for individual clients by $400 per year, meaning they will pay no more than $2,400 per year across their MyNorth accounts, and
- Reducing the administration fee cap for families by $500 per year, meaning clients and their families pay no more than $3,300 per year.
Other features of MyNorth’s pricing include:
- Clients only pay for what they invest in from MyNorth’s Core, Select and Choice menus. The Core menu, including the cash account, has no administration fees
- Clients can access lower administration fee rates as their total portfolio balance grows. These rates apply to every dollar invested (back-to-dollar-one pricing), and
- Families can benefit from family fee aggregation and caps. A family group can have up to 6 members with up to 6 accounts each.