Fund Product, Company and Regulatory Updates as at 21 January 2020
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Product Updates
Van Eck announces ETF model portfolio
Van Eck has released an exchange-traded fund (ETF) model portfolio for retirees. Asset allocations will come from the data of Lonsec and Van Eck, looking to provide an annual return of the consumer price index plus two per cent. Weighting favours Australian equities.
Elevate Super ESG-focused super fund to launch
A new super fund is coming to market, with an ESG focus. Elevate is a sub-plan of Aracon Superannuation, a subsidiary of Xplore Wealth. Elevate is a retail superannuation offering that is aiming for competitive returns while also investing sustainably.
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Company Updates
TAL replaced by MLC Life at TelstraSuper
MLC Life is the new group insurer at TelstraSuper, replacing incumbent TAL. The switch comes after a review of its insurance arrangements, which have been in place with TAL since 2006.
AMP FP closes MDA services, cuts trustee and five super funds
AMP Financial Planning has stopped offering managed discretionary account (MDA) services after licence conditions were imposed by the Australian Securities and Investments Commission (ASIC). In March 2019, after surveillance of the services and advice business, ASIC allowed AMP FP to modify its Australian financial services licence to provide MDA services with some conditions attached.
AMP FP was required to provide an acceptable attestation by 30 September 2019 to confirm it was complying with its conditions, however, this was not forthcoming in an acceptable way. ASIC denied AMP FP’s attestation. MDA services have since been discontinued.
MDAs come with some specific risks for retail clients, whereby the provider is able to make investment decisions on their behalf ongoing, without prior client approval. The risk increases if the person recommending the MDA service and making investment decisions is the same, since impartial advice may not be forthcoming.
AMP’s wealth management business is soon to remove a superannuation trustee and five superannuation unds. AMP has unveiled a new wealth management arm that excludes AMP Superannuation Limited (trustee), and five of its seven super funds. AMP is keeping two funds, Super Direction Fund and Wealth Fund with NM Super to be the trustee for both.
