AMP has swallowed the passive pill, appointing BlackRock to manage its KiwiSaver and superannuation master trust schemes under index conditions.
In a release this morning, AMP says it would replace its main incumbent manager – sister firm AMP Capital – “once preparatory activities have been completed”.
“The transition to the new investment model is expected to be completed before the end of June 2021,” the release says. “The changes will apply to the majority of AMP managed funds, including funds within the AMP KiwiSaver Scheme and New Zealand Retirement Trust (NZRT).”
Collectively, the NZRT and AMP KiwiSaver schemes amount to about $9.5 billion.
“The enhanced investment approach for AMP Wealth Management New Zealand is expected to improve outcomes for clients by delivering stronger fund performance through a simplified investment structure,” the release says. “There will be a clear focus on sustainable investment, supported by access to financial advice and market-leading digital tools to help clients grow their savings and achieve the best possible retirement.”
Jeff Ruscoe, AMP NZ acting head, said in the release, that clients would “continue to benefit from our full-service offering including access to financial advice, either face-to-face or over the phone, along with our range of market-leading digital tools, to help them make the most of their investments”.
“This includes access to a range of managed funds through other leading fund managers with different investment approaches, including Nikko, Mercer, ASB, and ANZ, providing them with even more choice and investment options to manage their savings through a single provider,” Ruscoe said.
A spokesperson for AMP Capital said: “We acknowledge AMP New Zealand Wealth Management’s (NZWM) decision to shift the AMP KiwiSaver Scheme, and some other funds, towards a predominantly index-based investment approach.
As a valued client we thank NZWM for their partnership over many years and will work with them to ensure a smooth transition for their clients. AMP Capital NZ will continue to provide active investment management options on NZWM’s WealthView platform, as well as a range of investment solutions for other external clients, across real asset capabilities of real estate and infrastructure as well as in fixed income and global equities.”
AMP launched an investment review earlier this year ahead of the new default scheme process now underway. The government has indicated it could cut the number of default providers in half, leaving AMP – the most-exposed to default members – at risk.
The broader ASX-listed AMP is also reviewing its entire operations with a sale or break-up on the table.