AMP reduces cost of capital guarantee in North platform
AMP has reduced the cost of the capital guarantee it offers on a number of products available through its North platform and closed off the guarantee on existing funds to new clients.
The platform has also added three new funds that will offer lower investment costs to North investors than the 11 funds previously offered with the capital guarantee via North.
AMP head of platform products Adrienne Cochrane said each capital guaranteed fund on the North platform had three fees - platform administration, capital guarantee and investment costs - with the newer funds being offered with reduced investment and guarantee costs.
While the platform administration fee would continue to start at 95 basis points and decrease as funds under management per investor increase, the cost of the guarantee option has been reduced by 30 basis points on the new funds.
Cochrane said the investment cost would also be set at 59 basis points, taking a mid-position between the investment cost on existing funds which was 45 basis points for index positions and 72-92 basis points for active investment options.
The three new funds will be the only funds available on North to new customers seeking a guarantee, while existing customers will retain access to previous guarantee options offered on the 11 funds already available on the platform. These customers would be able to access the new pricing structure if they invested in the new funds or transferred their existing investment across to them.
The three new funds will invest in a blend of Australian and international equities, fixed income and cash. They will offer growth, balanced and moderately defensive investment options.
AMP introduced the North guarantee in 2007 to allow investors to benefit from high markets and to protect themselves against falling markets for an additional cost.
AMP said the North range was designed to provide a rate of investment growth in line with diversified funds that held comparable target asset allocations, but managed short-term market movements by increasing or decreasing exposure to shares based on estimated short-term market volatility.
AMP platforms director Steve Burgess said the changes would allow North investors to manage volatility within their portfolios and access the guarantee option and remain in protected growth assets to preserve money in retirement.
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