AXA adds to low-cost platform congestion

By John Wilkinson

AXA Australia has raised the level of competition in the rapidly growing low-cost platform arena with the formal unveiling of its new baby wrap last week — Generations.

The offering is a simplified version of Summit, although AXA head of wealth management Steve Burgess says the latter will remain in the marketplace as the sophisticated full service platform, with Generations being an addition to the range.

The new retail mini-master trust consists of a simple product offering with limited features and a management expense ratio (MER) below 2 per cent, while advisers receive a 0.6 per cent trail.

“We have built a simple low cost product that will compete with other trusts such as Colonial FirstChoice,” Burgess says.

Generations will comprise superannuation, pensions and investments products, as well as the latest version of VisiPlan software.

The investment portfolios will be managed by Ipac and will feature five multi-manager diversified choices.

There will also be 21 single managers with sector specialist skills and a blend of hedged and unhedged options for international equities.

The list of managers includes Alliance and Bernstein, both owned by AXA, as well as Perpetual Investments, Credit Suisse Asset Management and Platinum Asset Management.

Burgess says AXA now offers solutions for all segments of an adviser’s client base in one single platform.

“Many advisers are using more than one platform to meet the needs of all their clients, so one platform will bring them cost savings,” he says.

The new platform will be available to AXA aligned dealer groups, Jigsaw clients and non-aligned advisers.

Generations has cost AXA more than $30 million to develop and Burgess estimates the company will be spending between $10 million and $15 million a year to remain competitive.

The yearly development spend will go on product features, compliance and process improvements to handle growth of funds under administration.

Generations is being launched on September 6 and AXA hopes to attract $50 million of fund flows into the new platform before the year end.

By the end of 2005, it hopes to have $600 million in the platform and Burgess accepts some of that will come from Summit.

The company is also hoping to boost fund flows to Alliance and Bernstein via the platform. At present, about 15 per cent of fund inflows into Summit go to the two US managers. Burgess says they hope to lift this to between 20 and 25 per cent.