Pledged demand requirements will lead to drop in product numbers: Harrop
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The new requirement to prove $15 million in pledged demand from financial planners for a new product to be introduced onto a platform is going to lead to a reduction in the number of products in the marketplace, according to the AMP Capital Investors head of retail distribution, Ben Harrop.
“To get a new product on to their [platform] menus now, you’ve got to demonstrate around $15 million of pledged demand from financial planners, so that means the planner has to commit in writing … and it has to go up to at least $15 million to be considered by the trustee committee.
“What that means is that unless you have that, you just won’t get it on to the [platform] menu. This will have an impact on the proliferation of products coming into the industry.”
Five years ago there was no such requirement, he said.
Harrop also said the increased scrutiny around the risks embedded in a fund was adding an extra hurdle to the introduction of new products.
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