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When cash went negative at AMP
Cash investments within an AMP superannuation fund went backwards because the returns were outweighed by the administration fee, the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry has been told.
The negative cash returns were confirmed by the chairman of the AMP Super trustee, Richard Allert, who acknowledged that the trustee board was alerted to the issue following an inquiry from the Australian Prudential Regulation Authority.
Asked by counsel assisting the commission, Michael Hodge QC, why the cash allocation had generated a negative net return, Allert explained that the administration fee charged to the superannuation fund had absorbed the interest return of the product.
The Royal Commission had earlier heard that all of the AMP Superannuation funds’ administration issues were handled by other AMP entities, via AMP Life.
Allert said the administration fee had subsequently been reduced to 50 basis points from what might have been in excess of 100 basis points.
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