Colonial releases new master trust

Colonial First Statehas completed almost nine months of planning for its much-anticipated new master trust, gearing up to launch the investment platform to its financial planners from next week.

The new master trust, FirstChoice, will become the flagship investment platform for financial advisers across the Colonial /Commonwealth Bankgroup, although it will also be offered to other independent financial advisers and dealer groups.

As reported byMoney Managementin March, Colonial will embark on a program, expected to take up to two years, to wind up and roll the existing master trusts of the combined Colonial / Commonwealth groups into FirstChoice.

“There are a number of other master trusts within the group that are now coming under the Colonial First State’s management structure and our brief is very clear: to rationalise that range and move them across to FirstChoice,” Colonial First State general manager of Distribution Michael Cant says.

The new master trust will offer some 45 investment choices, including nine multi-manager options.

Asset consulting groupTowers Perrin, who will be given an open brief by Colonial First State in terms of the managers it selects, will construct the multi-manager options for the master trust.

Colonial First State will also offer FirstChoice without asset management, administration and transaction based fees, choosing instead to charge investors one single fee based on the asset classes they invest in through the master trust.

The fees will range from 1.95 per cent of assets for all Australian equities investment options to 1.55 per cent for more conservative asset classes.

The launch of the master trust is the first product to emerge as a result of Colonial First State’s newfound mandate to lead product development across the entire Commonwealth Bank group.

Under the deal which saw Colonial First State merged with the Commonwealth’s funds management unit in March, Colonial First State took over all responsibility for the development of funds management and master trust products for the group.

But the launch of the master trust also marks the first move by Colonial First State away from an emphasis just on funds management and towards product development.

“We are charged with the responsibility of developing products throughout the group and I think that is a natural evolution for us,” Cant says.

Cant says Colonial First State’s funds management capabilities will be unaffected by the new focus.