Dozens of superannuation products offered by finance group AMP have failed the Australian regulator’s annual performance test, with the bulk of them failing for a second straight year.
All but one of the 37 products that failed the industry’s annual scorecard belonged to N.M. Superannuation Proprietary, which is part of AMP, according to the Australian Prudential Regulation Authority report released Aug. 30. The other product was offered by IOOF, part of Insignia Financial.
Some 27 of those investment options, including Insignia’s, failed for a second year and will be barred from accepting new members.
“We are disappointed that a small subset of investment options on the platform did not pass,” AMP Group Executive, Platforms Edwina Maloney, said in an emailed statement. “We are assessing the best approach for customers invested in these options going forward.”
AMP’s platforms offer more than 980 investments. APRA had imposed additional license conditions on N.M. Super in 2019 amid governance and risk management concerns, but those were removed earlier this month.
The AMP options that APRA failed “are only tested because they are inaccurately classified by the government as ‘trustee directed’,” Maloney said. “We strongly support industry calls for a review of the test.”
The regulator’s fourth annual test assessed the financial performance of 57 default products that make up the bulk of member accounts and 590 other products offering more specialized investment options. All of the default products passed the test for the first time, APRA said.
APRA’s test has become a key monitoring tool for both the regulator and Australian workers as the nation’s A$3.9 trillion supers industry becomes more competitive with scale. It’s designed to improve transparency by assessing the long-term performance of products against tailored benchmarks.
The government is, however, reviewing the annual test, amid debate about the metrics it uses. APRA said Aug. 30 it expects to publish more detailed product performance metrics and data in late September.
The one Insignia product that failed “has around 240 members in it and is closed to new members,” a spokesperson said in an emailed statement. “We continue to speak to the government on the need for further refinement of the performance test.”
