AMP gives Mercer the boot

AMP Capital has dumped Mercer as asset consultant on its multi-manager funds, replacing it with US consulting firm Towers Watson, which brings an existing relationship with AXA.

Tuesday, November 29th 2011, 9:36PM 6 Comments

by Niko Kloeten

Towers Watson has advised on AXA's ipac diversified funds since 2006 and following a review was selected as a single asset consultant for the AMP Capital and ipac multi-manager funds.

Mercer has provided asset consulting services for AMP Capital's Future Directions and Responsible Investment Leaders ranges since 2003, and its agreement was due to expire at the end of the year.

AMP reviewed Mercer's role because of the deal's imminent expiry and because "AMP Capital's requirements for asset consulting services have changed in recent years as our multi-manager team has grown in size and increased its capability," according to a press release by AMP.

"The integration of AMP and AXA presented an opportunity to add the ipac multi-manager funds to the scope of the review and appoint a single asset consultant for the multi-manager funds of the combined business."

Ipac, a specialist multi-manager with about A$14 billion under management, was acquired by AXA in 2002.

Niko Kloeten can be contacted at niko@goodreturns.co.nz

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Comments from our readers

On 30 November 2011 at 7:46 am kate bunce said:

Will be interesting to see if the Crown replaces Mercer with Westpac as a default provider when the KiwiSaver default licences come up for renewal.

Apart from default clients they seem to have achieved little business.

On 30 November 2011 at 7:48 am paddy deardon said:

Fees are often to high in NZ for investment products and this undermines trust and confidence.

Part of the problem is there are too many people trying to clip the ticket like asset consulants such as Mercer - unless they add value all they do is add cost and not sure they add value.

Good on AMP for trying to simplify and make investments better by taking away those who may not add value.

On 30 November 2011 at 9:39 am Punter said:

Don't AMP manage all of the fixed interest in Mercer's funds (including KiwiSaver)? Bet you $10 that more managers get appointed alongside them for these portfolios.

And hey Paddy - how does replacing one consultant with another reduce costs to the end investor?

On 30 November 2011 at 8:58 pm buttty said:

That is the point.

AMP-AXA have 2 consultants. They have Towers Watson from AXA and Mercers from AMP.

As part of the merger they are simplifying their business and droping one.

These guys get a lot of flak on this site and yep one needs to keep them honest.

However in this case they are reducing 2 consultants down to 1, simplifying their business and reduce their costs

Makes sense to me.

On 1 December 2011 at 9:37 am Dan said:

Does this mean that AMP's Kiwisaver performance will improve? According to Morningstar quarterly review, AMP is ranked in the bottom 3 funds in 5 different categories

On 1 December 2011 at 9:58 pm Jonathan said:

Dan. I am with Butty. Stop picking on these guys. Apart from a few average returns recently for KiwiSaver, they haven't done much wrong. At least they have avoided having frozen funds and those sorts of problems.