Change fund designations, says AMP

AMP has urged a move away from the model that pits industry superannuation funds against retail master trusts by implementing new descriptors for superannuation funds.

In its submission to the Cooper Review, AMP argued that the industry should move away from the categorisation of funds according to their ownership or legal structure such as industry, retail, corporate or self-managed fund.

It said instead, a new regulatory framework should be introduced based on the nature of the customers being served, such as 'default' market and 'choice market'.

In backing its argument, the AMP submission said industry funds had now generally become public offer funds and that the differences between large public offer industry funds and retail funds were becoming increasingly blurred.

It said notwithstanding the 'not for profit distinction', the customer offer from both segments had increasing similarities such as employing financial planners, the introduction of retirement products and the broadening of insurance offerings.

At the same time, the AMP submission argued that several retail funds were now offering low cost options that had many of the characteristics of an industry fund including low cost, simplicity and limited investment options.