Colonial expected to make changes to funds team
ColonialFirst State could be forced to make radical changes to its team of fund managers after investors were told to hold off from investing in both the group’s Australian and international equity funds in the space of a week.
In the latest damaging news for Colonial, the Morningstar research house placed a ‘hold’ rating on the group’s international share funds.
And the result could have been worse for the Commonwealth Bank-owned fund manager, with Morningstar shelving plans for an even lower rating, ‘avoid’, after Colonial gave strong signals it would make significant changes to kick-start performance.
“Part of the reason we only put them on hold is because we are expecting them to make changes. The team has obviously had some issues,” Morningstar head of research Justin Walsh said.
The news followed Standard & Poor’s (S&P) decision a few days earlier to place a hold rating on Colonial’s $7 billion Australian equities funds, a move prompted by the departure of senior portfolio manager Simon Hudson.
While S&P has indicated its caution to hold off from Colonial will be temporary until it can assess the competence of Hudson’s replacements, Morningstar’s evaluation of the group’s London-based international equities capabilities was scathing, with a report into the fund manager warning investors to “hold off here”.
Walsh said it was not clear what changes new Colonial chief Warwick Negus would consider, but said “from informal discussions we have had with Colonial, we are quietly confident [there would be changes]”.
Recommended for you
Sequoia Financial Group has announced it is selling off its Informed Investor subsidiary which it acquired in April 2022.
Wealth Data has examined which advice business model has seen the most growth since the start of the year including those that offer holistic advice.
Research conducted by Elixir Consulting and Lonsec has quantified the efficiency gains of using managed accounts in financial advice practices in hours per week saved.
With only one-quarter of advice practices actively seeking feedback from clients, the Financial Advice Association Australia has emphasised why this is a critical tool for client retention.