CFS focuses on adviser compliance
Colonial First State (CFS) is investing $430 million over five years into the business with aspirations of becoming the easiest provider to do business with for financial advisers.
The investment followed the announcement that CFS was now a standalone business after the Commonwealth Bank’s (CBA’s) 55% stake had officially been sold to private equity firm KKR on Wednesday.
Speaking to Money Management, CFS chief distribution officer, Bryce Quirk said the investment would focus on modernising its systems, platforms, and processes.
“We've set some pretty high aspirations for ourselves in this business, we do want to be the most competitive superannuation and investment business in Australia. We don't want to just compete, we want to be the best,” he said.
“As a result of that significant investment, we've got a big responsibility as a leadership team, and through my colleagues and my own team members, to now execute on that.
“We're making a commitment to the market that we're going to be more responsive, more nimble, and more customer focused. Ultimately, we have the goal of being the easiest product provider to do business with because we think if we can do that, then advisers will see the value in what we're delivering.”
One component of the funding would be used to separate CFS from CBA’s systems, but the majority would be used of the backend of both FirstChoice and FirstWrap platforms.
CFS looked to release a new platform that would initially run in parallel to FirstWrap at the end of next year.
“We've already spent a good 12 months working through a process of understanding vendors in the market,” Quirk said.
“We expect to be making some announcements around that in the coming months around who were partnering with, what is the functionality we will deliver and the timeframes as we deliver those to market.”
Eventually, FirstWrap would be integrated into the new platform.
On FirstChoice, CFS would focus on digitising some of the manual processes that sat behind it.
“We know from speaking with advisers that one of the biggest challenges they face is the compliance burden, so we’re investing in becoming far more efficient and the easiest partner to do business with, helping to reduce the administrative burden so that advisers can spend time doing what they do best – advising their clients,” Quirk said.
Quirk noted that CFS looked to better integrate CFS platforms with financial advisers’ own software and tools that would in turn lower the cost of delivering advice. However, the challenge was bringing all those technologies together.
“It's certainly a case of us integrating and building the layers within our products that allow us to share the data securely between those parties. So, there'd be no onus on the advisers to make any investments or material changes, he said.
Given KKR would own 55% and CFS 45%, Quirk said the two shareholders would be active in a governance capacity but that the executive team would run the business.
“Ultimately, they’ll both have representation in a corporate board capacity. But of course, we also have our superannuation board where we have our responsibilities to members and the independence that that brings to our decision making as well,” he said.
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