Australian Financial Services Group Targets Japanese And Indian Investors, Plans Internet Stockbroker

by Philip Morton, InvestorsOffshore.com

15 May 2001

AMP, the Australian provider of international financial services including pensions, fund management, insurance and banking, is expanding its range of retail financial services to capture the Japanese and Indian markets, and is also rumoured to be launching an execution-only stockbroker on the Internet.

AMP intends to establish itself in the Japanese market by offering an increasing range of financial products, with a strong emphasis on financial planning. Japanese technology company NEC will take a 10% equity interest in AMP's Japanese subsidiary, AMP Japan KK. AMP Japan's business model will be built around offering a targeted range of financial products via an e-enabled distribution platform. Among the products on offer will be mutual funds.

AMP's Managing Director of International & Technology Ventures, Mr Tim Wade, said: 'Japan has an affluent consumer market with one of the highest savings rate in the world. AMP is in a strong position to offer these consumers a fresh and simple new solution, a distinct advantage in a market where consumers are now looking for non-traditional providers. Delivery of products will comprise a combination of e-business education, advice and sales, backed by face-to-to-face sales personnel- an innovative approach in the Japanese market that will leverage our experience in Australia and the UK.'

In India, AMP is establishing a joint venture with The Sanmar Group, which will be known as AMP Sanmar Assurance Company Limited (ASAL), which will initially focus on the distribution of traditional life, pensions and savings products through an agency network. It is anticipated that the Indian market will move towards more recent product innovations and distribution methods, such as wrap accounts.

Mr Wade commented: 'Our focus is on sensibly leveraging our experience and capabilities in areas such as financial advice, industry convergence and product aggregation, the shift to Defined Contribution Pensions, and repositioning and managing an adviser channel. With over half the world's population, a rapidly emerging middle class, a strong savings culture and a window of opportunity thanks to deregulation and changing market structures, Asia is a significant long term opportunity for AMP.'

As far as AMP's online execution-only stockbroker is concerned, the London Times reported this week that it is aimed at an estimated two million people who have substantial investments and are not interested in advice services. The service will have no minimum or maximum portfolio size and will allow investors to trade in UK shares as well as UK-listed unit trusts. AMP head of e-business, John Blowers, was reported as saying the company would consider widening the service to include US and continental shares if demand were great enough. Share trades will cost £17.50, and unit trust trading will cost 1 per cent. The service also offers research on well-known stocks.

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