Click on our Secret Library of Evidence ------>

    BANKILEAKS Secret Library

Loan Application Forms (LAF's)  

    Bank Emails to Brokers  

    Then Click on 'VIEW NOTEBOOK'

Join us on facebook

facebook3           facebook2 


What BFCSA Does...

BFCSA investigates fraud involving lenders, spruikers and financial planners worldwide.  Full Doc, Low Doc, No Doc loans, Lines of Credit and Buffer loans appear to be normal profit making financial products, however, these loans are set to implode within seven years.  For the past two decades, Ms Brailey, President of BFCSA (Inc), has been a tireless campaigner, championing the cause of older and low income people around the Globe who have fallen victim to banking and finance scams.  She has found that people of all ages are being targeted by Bankers offering faulty lending products. BFCSA warn that anyone who has signed up for one of these financial products, is in grave danger of losing their home.


Articles View Hits

Whistleblowers' Corner!

To all mortgage brokers, BDMs and loan approval officers! 
Pls Call Denise: 0401 642 344 

"Confidentiality is assured."

Cartoon Corner

Lighten your load today and "Laugh all the way to the bank!"

Denise Brailey

Led by award-winning consumer advocate Denise Brailey, BFCSA (Inc) are a group of people who are concerned about the appalling growth of Loan Fraud around the world. BFCSA (Inc) is a not for profit organisation in the spirit of global community concern and justice.

Click on the Cluster Map.

  • Home
    Home This is where you can find all the blog posts throughout the site.
  • Categories
    Categories Displays a list of categories from this blog.
  • Bloggers
    Bloggers Search for your favorite blogger from this site.
  • Login
    Login Login form

BFCSA: AMP to take a hit on super fee cap on low-balance accounts

  • Font size: Larger Smaller
  • Hits: 483
  • Print

AMP to take a hit on super fee cap on low-balance accounts

The Australian 12:00am May 26, 2018

Michael Roddan


Wealth major AMP faces a hit to almost $100 million in fee revenue it generates annually across hundreds of thousands of low-balance super accounts that are mostly made up of forgotten or lost super funds.

AMP has emerged as one the most vulnerable to a shake-up outlined in this month’s federal budget, which seeks to slash fees charged on ultra-low balance super funds.

Although the government’s incoming halt on the fee gouging will punish the $2.5 trillion retirement savings sector, the measure is another hit to the pressured business model of AMP, which is among the nation’s largest superannuation managers with $118 billion under management.

Proposals announced by Financial Services Minister Kelly O’Dwyer will from July next year limit fees charged on super accounts with balances under $6000 to a maximum of 3 per cent.

“The government makes no apologies for ensuring we put in place the right protections for Australian consumers,” Ms O’Dwyer told The Weekend Australian. “We are concerned about the undue erosion of superannuation balances through excessive fees and inappropriate insurance arrangements,” she said.

AMP is understood to have close to 1 million customer super accounts with savings under $6000. Out of more than 200 regulated super funds in Australia, AMP also has the most member accounts with ultra-low balances under $1000.

At more than 820,000 accounts across two AMP trusts, these ultra-low balances make up a little more than a third of all the company’s member accounts.

It is close to double the amount of ultra-low balance accounts held by the next closest fund REST, which manages the savings of retail workers, and has 382,000 accounts below $1000.

The Weekend Australian can reveal savers with less than $1000 in their AMP MySuper Balanced accounts or AMP Lifecycle Active accounts would probably be charged between $112 and $106 a year in fees, depending on their level of savings. The charges, made up of a monthly member fee of up to $8.80, along with fees for investment and administration levied at between 0.15 to 0.6 per cent of savings, put the overall fees well above the government’s new proposed caps.

Compared to the government’s proposed 3 per cent cap, customers with $1000 in savings are being slugged an annual fee above 10 per cent. For a saver with just $500 in their account, the charges skyrocket to an annual fee of 22 per cent, and rise for members with lower savings.

AMP did not dispute the ­figures supplied by The Weekend Australian. However, many of AMP’s corporate super customers, such as Woolworths and Coca-Cola Amatil, are offered discounts on fees when they agree to have their employees’ super managed by the company.

“We are working through the implications of the budget proposals for our customers and will participate in the industry consultation process on their behalf,” an AMP spokesman said.

AMP’s annual revenue collected from charging fees to these customers with savings below $1000 is estimated at between $90m and $75m. The government’s proposed fee cap, should it be passed into law, will likely slash this to between $25m and $2.5m in revenue a year.

AMP is also believed to have another 160,000 accounts with balances between $1000 and $6000, which will also be affected by the budget proposals.

AMP is already under pressure following revelations in the Hayne royal commission, where AMP was found to have charged for financial advice it did not provide customers. The company also allegedly misled the corporate regulator about an independent report into the affair.

The scandal has resulted in the resignation of AMP’s chief executive Craig Meller, chairman Catherine Brenner, chief legal officer Brian Salter and three board directors. About $4bn has been wiped from the company’s share market value in the past month.

AMP receives a large amount of default super, where the savings of the least engaged savers, who fail to nominate their own fund, is managed. The company is listed in 15 modern employment awards, and is one of the top 10 funds in the default system when measured by the number of award listings.

However, the issue of fee gouging on low-balance accounts is rife across both the bank-owned retail sector and the union-and-employer-backed industry fund sector. With many Australians holding multiple accounts across several providers, almost half of the accounts in the super system are thought to have low balances.

Gillard government reforms in 2013, which required all super accounts be charged the same member fee, led to an unintended consequence where low-balance protections in the super industry were abolished.

“Bill Shorten, when he was financial services minister uncapped fees and charges and forced young people to pay insurance premiums that they otherwise didn’t need or didn’t want,” Ms O’Dwyer said. “Our changes will protect the hard-earned retirement savings of millions of Australians,” she said.

Last modified on
Rate this blog entry: