Move comes nearly a decade after traditional lenders fled the market
AMP Bank is relaunching its SuperEdge residential self-managed super fund (SMSF) product after bowing out of the SMSF lending space in 2018.
The strategic move comes amid a groundswell in demand from brokers and borrowers for SMSF lending solutions, particularly among Australians nearing retirement.
Many major and non-major banks, including Commonwealth Bank, Westpac and AMP Bank, exited the SMSF space toward the end of the previous decade following prolonged scrutiny over leveraged super investments.
NAB exited the space as far back as 2015, while Macquarie announced its exit in 2019.
Both the 2014 Financial System Inquiry and the Banking Royal Commission spotlighted the risks involved in using funds intended for retirement as an investment vehicle. These risks were magnified by the housing market downfall in the latter half of the 2010s.
But with over $1 trillion in assets tied up in SMSFs across 1.2 million members, and a housing market showing no clear signs of a drastic downturn, more and more trustees are demanding flexibility and liquidity in their investment options.
“SuperEdge will meet that need, providing a transparent, well-governed lending option delivered through brokers and directly through AMP Bank’s home lending specialists, and supported by a strong credit and compliance framework,” said AMP Bank in a press release.
Following the mass exodus of traditional lenders from the SMSF space, non-bank lenders like Pepper Money, Firstmac and Liberty have firmly planted their flag in the space.
AMP Bank highlighted the availability of offset flexibility, which non-banks cannot provide, as a market advantage. The bank will also implement numerous safety measures including liquidity tests and a maximum LVR of 80%.
AMP Bank group executive Sean O’Malley (pictured, right) noted the mounting complexity of Australian retirement planning.
He said: “Australians approaching retirement are balancing two competing pressures – enjoying life today, while making sure they’ll have enough for tomorrow. That tension is driving demand for solutions that offer more control, flexibility and confidence.
“SMSF trustees want to retire on their terms – but without the right structure and support, those decisions can become harder. SuperEdge is designed to provide trustees with a competitive, transparent and responsible lending option as they build long-term wealth.”
Michael Christofides (pictured, left), AMP’s director of lending and everyday banking, added: “SuperEdge combines practical features, like flexible repayments and an optional offset, with a digital broker experience that helps reduce friction and improve turnaround times.
“We’ve built in automated SMSF structure checks and document validation to help cut rework – while maintaining strong responsible lending settings.”
Currently in its pilot testing chase, SuperEdge is scheduled to be rolled out to the broader market this quarter.
It is yet to be seen whether other banks will follow in AMP Bank’s footsteps and reenter the SMSF lending space, especially since major lenders like ANZ, CBA and Macquarie have moved to limit or completely ban lending to trusts and companies, ostensibly as a way of limiting risk exposure amid a regulatory clampdown on high-risk lending.
