CBA to demerge wealth management business
The Commonwealth Bank (CBA) has announced that it will demerge its wealth management and mortgage broking businesses, which will result in the creation of an independent wealth management business.
The demerged business, CFS Group, would include the Colonial First State, Colonial First State Global Asset Management (CFSGAM), Count Financial, Financial Wisdom and Aussie Home Loans businesses.
As a result, CBA told the ASX that the previously announced initial public offering of CFSGAM would not proceed. The bank said that as an independent business, CFS Group could “enable CFSGAM to realise its full potential for its customers and staff”.
The bank’s salaried financial advice business, Commonwealth Financial Planning, would be retained by CBA and would form part of its consumer financial services business within its retail banking services division.
CBA chief executive, Matt Comyn, acknowledged that the decision was partially due to community pressure on banks regarding their wealth management businesses.
“Today’s announcement is another step in our stated priority to become a simpler, better bank and has followed a thorough review of the group’s businesses and its optimal organisational structure to drive growth and shareholder value for all businesses,” Comyn said.
“It also responds to continuing shifts in the external environment and community expectations, and addresses the concerns regarding banks owning wealth management businesses.
“By allowing CBA and CFS Group to focus on their core businesses and market-leading positions, we believe the plan will unlock value in both groups for our shareholders.”
The bank also announced that it will undertake a strategic review of its general insurance business, CommInsure, including a potential sale.
AUTHOR
Hannah Wootton
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
