AMP wants choice for all

State Governments have been called on to extend the scope of ‘choice of fund’ to cover all employees and not just those covered under Federal Awards, with one of Australia’s largest financial services groups arguing existing legislation is exclusionary to millions of Australians.

Addressing delegates at a Finance Executives International lunch yesterday AMP Financial Services managing director Craig Dunn urged the Government to extend choice to cover the 60 per cent of the workforce currently employed under State Awards.

“While 40 per cent of the Australian workforce will have the right to choose where their super money goes from July next year, many other Australians won’t have choice and control over their retirement savings,” Dunn said.

An extension of the provision would open up the gates to non-industry providers to make inroads on a previously untouchable segment of the superannuation market.

However Dunn argued there would not be a mass marketing campaign by retail providers once choice comes into force, and in fact he believed many superannuants would remain in their existing funds.

“Consumer-focused, efficient providers will survive; complacent, inward-looking or high cost providers will not — which is a very good thing for consumers and the industry,” Dunn said.

“Without having to do a thing, consumers will automatically be in a better position because choice of fund will lead to a more productive, more competitive industry,” he said.

Dunn said this would also help make life a little easier for those employers who may be faced with the situation of having a group of employees who will have choice and a group who will not.

The declaration comes just days after AMP Financial Planning announced it would add ten of the union-backed not-for-profit funds to its approved list, but would limit the extent of advice given to existing industry fund members, prohibiting advisers from recommending new clients to join an industry fund.