AXA guns for corporate super
AXAis looking to offer a more sophisticated service to outsourced corporate super clients, which to date have been bundled with its retail clients in the AXA Super Directions For Business product.
AXA head of superannuation Steve Burgess says while no final decision has been taken to launch a product, if offered it will include multiple investment choices and insurance products.
The decision to launch a specific product to corporate super clients is based on the extra sophistication needed in servicing these clients, but it must be weighed against the highly competitive nature of servicing this part of the market, Burgess says.
Burgess also hints at the possibility of AXA entering the self-managed superannuation market, which will include the offering of administration services, but again, no final decision has been made as to whether the company will enter this part of the market.
In other news, AXA is making a concerted effort to win more superannuation business before the end of the financial year by offering extra commission to advisers, and is also offering clients extra units if they sign up by June 30 — the peak time for superannuation inflows.
Burgess says the client deal applies to Super Directions retail products and can include an extra five per cent of units.
“It is essentially a bonus allocation of units for clients. We will, however, continue to pay commissions to advisers as well,” he says.
The new deal applies to contributions in excess of $30,000 and there is a sliding scale of commissions and extra units. If the adviser takes the full five per cent commission, the client gets 2.5 per cent of extra units. However, if the adviser only takes 2.5 per cent commission, the client gets five per cent of extra units.
AXA will also be paying advisers an additional one per cent commission for new business written for its Super Directions for Business product. The entry point for the extra commission is $300,000 or more of new business.
Burgess says the moves are to win more superannuation business for the company and the projected extra volumes of business will keep AXA’s superannuation business profitable.
“While we believe these offers are unique in the Australian market, AXA has made similar offers in the UK market in recent years.”
Burgess says the bonus offers are common in the UK as a means of boosting superannuation business, but he is not expecting AXA’s Australian competitors to follow suit.
“I think it will take them [AXA’s competitors] some time to work out how to do it and remain profitable,” he says.
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