AMP becomes first super fund to invest in crypto

A major super fund invests in bitcoin, health funds called out over price increase loophole, and a leading insurer milks loyal customers. Here are five things you may have missed this week.

AMP Super adds crypto to portfolio mix

It's been a crazy few weeks for bitcoin, which made headlines globally when it smashed through the $US100,000 barrier earlier this month.

In true crypto style, it didn't stay there long.

Bitcoin fell to around $US95,000 this week, only to climb back to $US100,000 by early Friday morning.

It's the sort of rollercoaster ride we've come to expect of the leading cryptocurrency.

This volatility hasn't stopped AMP investing a portion of its superannuation assets in bitcoin.

Steve Flegg, senior portfolio manager at AMP, announced on LinkedIn this week that "AMP portfolios took the plunge and made a modest allocation to bitcoin."

The modest allocation is reported to be $27 million.

Flegg acknowledges that crypto is "risky, new and not yet fully proven", but believes it has "become too big, and its potential was too great to ignore".

Chief investment officer Anna Shelley says AMP made a small investment through its Dynamic Asset Allocation program in May following testing.

"Bitcoin futures are not a strategic investment of the super fund, they are a tradeable asset that can be diversifying and profitable for members as part of a risk-controlled, systematic process," she says.

"The exposure, which currently represents around 0.05% of our total superannuation assets under management, recognises the structural changes in the industry over the past year, including the launch of SEC-approved exchange traded funds by leading international investment managers.

"While our super members have benefited from the exposure, we fully appreciate the risk and volatility characteristics of this emerging asset class and will continue to carefully manage our holding, which is a fractional component of a highly diversified asset mix."

The news generated plenty of comments - both for and against the decision.

That's not surprising. One in four (27%) Australians have owned or are interested in owning crypto though for some, it's all too confusing.

Michele Bullock, Reserve Bank Governor, who has close to 40 years' experience in financial markets, recently declared  she "doesn't understand" bitcoin, and says "I don't really see a role for it in the Australian economy or the payments system."

Health funds warned to stop using a sneaky loophole to fleece consumers

Health funds are only permitted to raise premiums once each year on April 1 - and the hike has to be government-approved.

But an investigation by the Commonwealth Ombudsman confirmed this week that many insurers are getting around the once-yearly increase by closing cheaper Gold-tier policies to new customers, and releasing near-identical policies with much higher premiums.

While this isn't illegal, it's hardly playing fair by consumers.

In 2024, new policies cost 14% more, on average, than the closed policies.

Health Minister Mark Butler says the loophole is making the best value policies disappear and forcing customers to take out more expensive policies.

He says, "It's a cheap trick that makes your health insurance more expensive, and it's got to stop."

Butler has warned insurers to end the practice immediately or he'll "force them to stop."

ASIC sues Rex and four directors for 'serious governance failures'

Corporate watchdog ASIC is suing Rex Airlines and four of its directors, alleging the company misled the market about its profitability.

In February 2023, Rex - a publicly listed company - issued an investor briefing claiming it was "cautiously optimistic" the company would be profitable for the financial year ended 30 June 2023.

At this stage, Rex had racked up a half-yearly loss of around $16 million.

Just months later, in June 2023, Rex downgraded its expectations, forecasting a $35 million loss for the financial year.

By July 2024, Rex had entered voluntary administration.

ASIC chair Joe Longo, says, "We will allege four of Rex's directors breached their duties because they failed to take steps to ensure the market had accurate information about the company's financial performance."

The directors involved could face financial penalties if found guilty.

Rex is still operating regional routes, backed by a Federal Government guarantee that will see passengers receive a publicly-funded refund if the airline cancels a flight and can't pay refunds itself.

NRMA facing action over loyalty discounts

Here's proof of the value of shopping around for home and contents cover.

Legal firm Slater and Gordon has filed a class action on behalf of what it says are "millions of customers" relating to the pricing of NRMA home and/or contents insurance policies issued by industry giant Insurance Australia Limited (IAL).

Slater and Gordon's Ben Hardwick says a pricing algorithm was used to identify those customers least likely to switch to a different insurer if their premiums were hiked.

The algorithm then upped the premium of the hapless consumers.

"We're alleging that millions of Australians paid premiums year-on-year for NRMA home insurance on the promise that they were getting a discount," explains Hardwick. "But in reality, long term customers were unknowingly paying extra in the form of higher base premiums."

He adds, "Consumers are demanding to be compensated for the loss and damages we say they have suffered as a result of IAL's conduct."

Moving can trigger a fresh approach to finances

Moving house can be hard work - all that packing and deciding what to keep and what to toss.

But it can also trigger a new mindset.

Research by REA Group, which owns realestate.com.au, shows two in three movers have reviewed their lifestyle, started fresh routines, or experienced something new when relocating.

A further two in three say relocating was a cue to take stock of their finances.

REA Group's Rob Hudson, says, "12% of Australian households relocate annually, and while moving house can be a highly emotional and stressful time, it's also a window for transition, sparking change in many aspects of life."

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