Bank’s remain single minded in new year
The newsin late December that the Commonwealth will fold the funds management operations of Colonial First State into its own operations, signals the end of a slow joining of the two groups.
From the time the deal was announced through to the closing of Colonial First State bank branches and the absorption of Colonial planners and now investment staff, the whole process has taken in excess of 18 months.
However, what it also signifies is the bank’s intentions in regards to the funds management and financial planning sectors are still clear, which is its seeking to carve itself a larger slice of the market.
Among the big four banks, both the Commonwealth and National now have externally built and purchased funds management groups, as well as distribution, though they have differed in the way they have chosen to integrate them. Nonetheless, they are both cross-selling products between the two divisions.
Of the other two banks, the ANZ is seeking a funds management partner and Westpac has been building its own empire from within and boasts planner numbers in excess of 700, making it the fourth largest planning group in the country.
Other banks are also in on the game, with St George holding Advance Funds Management, and various state and rural banking groups offering a range of products beyond the usual suite of bank accounts.
Of course, it is easy to dismiss the banks as offering products designed for a wider market and are therefore more generic but nonetheless, they still have the relationship with the client and an inside knowledge of their spending and saving patterns.
However, the biggest advantage the banks will start to leverage off is that they can train, equip and host planners, while supplying them with a ready selection of leads and new business mined out of their own database.
The reason this is important is because for some time we have been told of the demand for financial services but the lack of financial advisers and planners.
Every new dealer group has expansion plans but the pool of talent is finite and the training time for well-rounded planners is a few years, not withstanding the cost involved.
It is true that the levels of service from bank based planners varies but it is only a matter of time before they can and will offer the very same services that large dealer groups offer, with the same levels of expertise and professionalism.
In 12 months time it would be interesting to see how much of this has come to pass. The banks have the infrastructure, capital and market exposure to do so, whether they make the most of it is the only remaining question.
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