Under-pressure wealth manager AMP (ASX:AMP)
has introduced cuts between 12 per cent and 22 per cent to its admin fees for superannuation and investment services.
The move comes at the expense of short-term income in the company’s bid to generate more traction with financial advisors and high-income investors and boost subscription levels for its flagship MyNorth platform, in an attempt to make headway against losses worth billions of dollars .
The $3.7 billion financial services provider has downgraded annual admin fee caps for individual clients by $400 and families by $500. More fee reductions are expected to follow in the last quarter for FY21.
The company has justified these reductions as a token of support for better transparency in trading and portfolio management practices.
AMP’s CEO Scott Harley stated, “We are not going to play that opaque game as it creates inequity for financial advisers and their clients and is arguably breaching legal obligations to treat members fairly,”
The wealth management industry currently presents a market of opportunities worth $840 million, as giants such as AMP (ASX:AMP)
, IOOF (ASX:IFL)
, HUB24 (ASX:HUB)
and Netwealth (ASX:NWL)
compete for greater market share.
AMP’s lower pricing has given the company a competitive edge, as the costs of accessing its wealth management and trading platforms are comparatively lower than those operated by major competitors.
Shares in AMP (ASX:AMP)
are trading 0.7 per cent lower at $1.07