Christmas has come early for the bank’s shareholders with the decision to slightly increase the 2024 dividend – despite a single-digit decline in the net profit and cash earnings.
Beating the market benchmark is never easy, with 72 per cent of Australian actively managed global equity general funds trailing the S&P World Index in the six months to June 30, 2024. Domestic equity funds performed slightly better, albeit against a significantly lower bar set by the S&P/ASX 200 Index.
AMP gets creative with new retirement product suite
Wealth provider AMP has embraced compromise in the design of its new flagship retirement product, MyNorth Lifetime.
Launched this morning, the product offers retirees both the security of a lifetime annuity and the flexibility of an account-based pension, ostensibly in exchange for the balance of their account when the account holder passes.
It operates like a traditional account-based pension account in that clients can choose investments, income levels and have transparency on their balance, yet it qualifies as an annuity because the account is topped up with an annual payment – underwritten by insurer TAL – and guaranteed for life.
The trade-off for the bonus, AMP explains, is the leftover balance at the end of term.
“The bonus is paid by 30 June every year and calculated as a percentage of the account balance,” AMP stated in a media release. “The annual bonus rates increase each year, and the only cost for these payments is the residual account balance after the payments of an optional death or exit benefit.”
Account holders will also pay a $91 annual account fee and a 0.1 per cent annual account fee. As the product is accessed on AMP’s North platform, the annual account fee is included in the bundled North fee caps of $2,400 for individuals and $3,300 for families.
A primary benefit of the hybrid offering is that by retaining the DNA of an annuity, the MyNorth Lifetime product qualifies for a 40 per cent upfront discount on the age pension asset test and increases the account holder’s ability to qualify for those payments.
Having a guaranteed income while retaining flexibility is the other; account holders can select their own investments depending on their risk appetite – with or without the help of a financial adviser – at any stage of their retirement.
Turning a corner
AMP’s offering comes as the latest in a series of institutional products designed to cater to the Retirement Income Covenant’s 2021 directive for superannuation fund trustees to have plans in place to prevent members from outliving their savings.
Market leaders Challenger and Allianz, as well as PIMCO and Generation Life, have all brought new products to market aimed at catering to the covenant. Fund manager Magellan also came up with a hybrid-style FuturePay offering in 2021 that was creative, albeit with a more convoluted design.
It also marks somewhat of a momentum shift for AMP, which has emerged from having its wealth division raked over the coals at the Hayne Royal Commission with a trimmed-down advice network and a renewed focus on the retirement sector.
AMP’s director of platforms, Edwina Maloney (pictured), called the new offering a “game-changer” for retirees and advisers. The provider has made it clear that it remains intent on retaining advisers as keen partners – or distributers, depending on your outlook – during the product’s rollout.
“Working closely with advisers to provide more retirees with this confidence is a priority, and we’ll continue to work with advisers as we invest in North, including its investment menu and functionality,” Maloney stated.
“As an industry we’ve needed to do better to help Australians take full advantage of their hard-earned retirement savings, with too many fearful their savings won’t last long enough.”
