Unusually, this question has come up quite a few times recently from our clients. Starting typing “Is my supera…….” into Google and it auto fills into “is my superannuation safe with AMP”. Seems like the question is getting asked a few times.
AMP obviously has been asked the question, so they have a few frequently asked questions on their website. AMP points out that that AMP products are not directly affected by the fallout from the Royal Commission. AMP Insurance has more than two million customers and has re-insurance agreements with two of the world’s largest re-insurers.
AMP superannuation and managed investment products, like all similar products in Australia, are held in trust structures that are strictly regulated to protect customer interests. The listed company, AMP Limited, can only collect fees from the trust structures for services rendered. The trustee can only manage the funds for the benefit of members – above the interests of AMP shareholders.
The retail deposit products invested into AMP Bank are protected by the Australian Government’s guarantee on deposits up to $250,000 for each customer’s combined holdings. AMP discloses that AMP Capital investment options have an exposure amount of less than 2% to the AMP share price across all AMP’s available investment options. AMP’s current share price has a market capitalization weighting of .37% in the ASX 200. A fall in AMP’s share price would only impact a client if AMP shares were held within your portfolio.
The AMP share price is quite a display of shareholder wealth destruction. AMP peaked in market value around June 2001, with a market capitalisation of $24.5 billion. There was a capital raise in June 2003 for $500m, a demerger with Hendersons (now Janus Henderson Group) in December 2003, whose share price has since tripled (of course), and a merger with AXA Asia Pacific Holdings in a $4billion deal. For all that, the current market capitalisation is now $6.3 billion.