AMP moving members into lifecycle funds
AMP Capital will begin moving over one million member accounts, around $15 billion, from former default funds to its new MySuper lifecycle funds by 2017.
Speaking at a roundtable luncheon on Wednesday, AMP director of corporate superannuation Libby Roy said she hopes the transition will result in members engaging more with their super and thinking about what they want.
The firm will have seven lifecycle, or target date funds that are organised around people's age in 10-year cohorts.
Each fund will have a dedicated portfolio manager and members will be put on a glide path where the way the portfolio is managed changes through the lifecycle as the member ages.
The portfolio will have higher exposure to illiquid assets in the early stages and it will move into volatility management as the member ages.
"We can on average estimate what is happening in people's lives, what sorts of life events are happening for them based on their age," Roy said.
"[But while] averages are nice, every individual is different. That's a great opportunity for people to engage and say, ‘my life's not like that. Actually I was planning to retire at 45. So this is the wrong fund for me'."
Head of multi-asset group Sean Henaghan said the lifecycle funds have a neutral asset allocation, where de-risking starts between ages 36 and 38 by about 3 per cent.
"I use the word neutral rather than strategic because effectively, these funds don't have strategic asset allocation," Henaghan said.
"What I mean by that is it's not a very formulaic static asset allocation change."
Roy also said there will be no conflict between its MySuper options and its fairly new self-managed super fund (SMSF) division.
Roy, who was previously director of Multiport, which is part of AMP's growing SMSF business, said the full spectrum would be available to her corporate super clients and she will offer an SMSF solution to those that ask for it.
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