Generational change for AXA platforms

The AXA group has set itself an ambitious target to generate $1 billion worth of inflows into its new Generations master trust within 12 months.

The platform, which AXA is dubbing a ‘lite’ master trust, is the group’s attempt to compete in the low cost platform sector — an increasingly competitive part of the market, with the likes of Skandia, Perpetual and Credit Suisse Asset Management launching products in recent times to fight it out with more established offerings from Colonial First State and ING.

AXA, which will offer Generations to financial advisers from this month, has spent $17 million developing the platform.

While acknowledging that some of the money flowing into Generations will be redirected from AXA’s existing Summit master trust, the group’s head of wealth management, Steve Burgess, says this will only be a small part of the $1 billion the new platform is hoping to attract over the next year.

Commenting on the rush towards low cost platforms, and away from full service offerings, Burgess says platform providers are responding to calls for cheaper fees from both clients and their advisers.

“Clearly price is driving it,” Burgess says.

“The clients that are coming through now are more financially savvy than before, so they are not prepared to pay for things they don’t want.”

Generations, which is effectively a cut-down version of Summit, will comprise superannuation, pensions and investments products, all of which will attract the same bundled administration and management fees.

The fees, which range from 0.95 per cent to 2.50 per cent, will vary depending on the investment options chosen.

The investment portfolios will be managed by Ipac and will feature eight multi-manager-diversified choices. There will also be 21 single manager options.

For advisers, AXA is offering an up-front commission of up to 4.4 per cent, which advisers can choose to dial down. There is also an ongoing trail commission of 0.6 per cent.

“There is still a market out there for the top-end platforms,” Burgess says. “But mass-affluent people will be putting their money into products like this.”