MLC migrates fee-for-service to super products

National Australia Bank subsidiary MLC has taken another step down the fee-for-service route, announcing today that it will be applying a fee-for-service approach to its personal superannuation offering combined with a revamped pricing structure.

MLC chief operating officer John Salamito said the fee-for-service approach would be applied to the company’s MasterKey Super Fundamentals package, scheduled to go live next week.

He said that as part of the launch, MLC had reviewed its pricing structure and was reducing administration fees on both MasterKey Super Fundamentals and MLC’s traditional commission-based platform, MasterKey Super.

According to MLC, the new fee-for-service offer has no asset-based commissions built into the administration fee, enabling advisers to charge an explicit adviser service fee that is agreed with their clients and separately disclosed on annual statements.

“To help advisers transition to a fee-for-service model, we need to provide platforms, products and services that support this model,” Salamito said. “More than 40 per cent of the business written by MLC in 2006 was on a fee-for-service basis, and this number is only going to increase as advisers adapt their businesses to reflect changing customer needs and distance themselves from the noise that surrounds commissions.”

Under the new structure, MLC clients with account balances from $100,000 to under $200,000 in MasterKey Super Fundamentals will pay an annual administration fee of 0.77 per cent, while clients with $400,000 or more will pay just 0.34 per cent after the MasterKey fee refund is applied.