In a further move preparing the business for sale, MLC Wealth has announced significant fee cuts to its wrap products.
The company announced it would be delivering administration fee cuts of up to 50 per cent across its Wrap and retail MasterKey Super and Pension Fundamentals products with MLC Wealth chief executive, Geoff Lloyd claiming it represented an effort to win back trust.
“We want to lead the industry in winning back trust, and these pricing changes are an important step in showing our clients and their advisers that we have listened to them and we are changing,” he said.
According to the company’s announcement, effective from 4 February, the administration fees for MLC’s retail Wrap Series 2 platforms would be halved to 0.15 per cent per annum on the balance between $200,000 and $500,000. Administration fees for the balance above $500,000 will be cut 40 per cent to 0.03 per cent per annum.
“Based on an average balance of $480,000, the new administration fee reduction will represent a saving of 23 per cent on the Wrap platform, making our platform one of the cheapest in the country,’’ Lloyd said.
Under the pricing changes, clients with up to four family members would be treated as one group, and annual administration fees would be capped at a maximum of $3,600 per superannuation family group and $3,000 per investment group.
MLC would also be lowering the administration fee for its retail MasterKey Super and Pension Fundamentals product, which would come into effect from 1 April.
For balances up to $200,000, the administration fee would be cut by 25 per cent to 0.30 per cent per annum. Fees for the balance between $200,000 and $800,000 would be reduced from 0.25 per cent to 0.20 per cent per annum.
The flat fee for balances under $50,000 would fall from $130 to $78 per annum.
Lloyd’s announcement pointed to the fact that over the past six months, MLC Wealth had made other key changes including that NAB Financial Planning and NAB Direct Advice would no longer be accepting grandfathered commissions and that net interest paid was increased by 0.75 per cent a year for Wrap Cash Accounts