AMP still tops the tables with employer super assets of $8.2 billion (see table), but it has a number of players aggressively snapping at its heels. Among these are Mercer, which grew its assets by a whopping $1.5 billion to $5.4 billion in the year to end June, according to Dexx&r.
AMP, however, is determined to stay its ground. It has restructured its corporate super operations under one umbrella and it has hired highly respected Ken Lockery as head of corporate superannuation strategy. Now it is launching a new master trust targeted at the medium to large corporate fund market.
AMP, however, is not the first recent entrant into this highly competitive part of the market, which is currently dominated by Mercer and Plum. In July, Towers Perrin opened the doors of its master trust, specially built to suit the needs of larger super funds.
But Towers Perrin principal Steve Schubert says it’s not his group’s focus to go out and aggressively market the product. “We will be selective with that. We want to develop a solution that meets a need of a client. We don’t have an army of sales people out there.”
AMP’s offering appears to have many of the ingredients needed to make it at the more sophisticated big end of town.
It has scale because it piggybacks off the $20 billion AMP already manages in master trust products and AMP’s established platform which administers over two million active accounts. It also has a competitive member education program and can rely on AMP’s huge financial planning base spread across the country.
The master trust will have around 55 member investment choices, including multi-manager as well as passive or active options. And it will be able to handle defined benefit components in-house in a way which, Lockery says, will appear seamless to clients.
He says AMP administered defined benefit systems up until 12 months ago and still has the people and systems to make it work.
However, tender consultant Warren Chant, of Chant West Financial Services, believes that while AMP has lots of things going for it, the group will face some difficulties.
“What largely counts in this market is defined benefit administration,” says Chant. “AMP isn’t renowned for that and will have to prove that it can do it.”
He adds that AMP also doesn’t have the proven experience in servicing larger funds and while financial planning is important, all the master trusts offer it . On the positive side, however, he says AMP can be aggressive on insurance if it wants to be.
