AMP moves to 'fee for service' model

AMP Financial Services managing director Jack Regan Photo / Supplied

AMP Financial Services is moving to a fee for service charging model for new investment products sold by AMP from July 2011.

This means an end to in-built commissions and investors will instead pay a clearly stated fee for an agreed level of advice and service.

"AMP's fee for service pricing model is a contemporary way to give our investors the clear pricing they're asking for," AMP New Zealand managing director Jack Regan said.

The company is hoping that the move will give investors greater certainty about fees and charges on investments, help encourage saving and strengthen investors' confidence in financial markets.

AMP said the move is consistent with moves by regulators and the Government's Savings Working Group to create a more positive savings environment in New Zealand and increase personal savings' levels.

Where pricing is clear, investors' trust increases and they are more likely to invest, AMP said, citing independent research it has commissioned.

AMP is going ahead with the fee for service model even though the research it commissioned showed 42 per cent of investors do not want to pay up front and still prefer paying by commission.

AMP said change was needed to bring remuneration of financial advisers in line with the norms set by other industries where fees and charges are clearly set out and transparent.

KiwiSaver investors in AMP's KiwiSaver Scheme will continue to pay a service fee.

- NZPA