AMP faces pressure on corporate super
At least four corporate superannuation clients of AMP Limited have started the process of testing the market for new default superannuation fund providers.
One of AMP’s largest corporate superannuation clients, Australia Post was in early April reported to be considering its future arrangements with AMP after facing pressure from unions representing its employees, including the Communications Workers Union.
That pressure followed AMP’s appearance at the first round of hearings of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry and subsequent revelations during hearings focused on superannuation and insurance have contributed to client concerns.
Money Management has been told that a further three corporate fund clients of AMP were also reviewing their arrangements.
The reviews come despite AMP announcing in late July that it was it was reducing a range of fees within its superannuation business as part of its strategy to “reset the business”.
Sitting at the heart of the AMP fee changes were reductions to its flagship MySuper products set to come into effect in the third quarter of the current financial year.
The reviews being undertaken by AMP’s corporate superannuation clients also come as the Royal Commission has posed the question of whether superannuation licensees should be prohibited from engaging an associated entity as the fund’s group life insurer – something which would have a significant impact on AMP life insurance business.
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The Life Insurance Code of Practice has transferred from the Financial Services Council to the Council of Australian Life Insurers.
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