FirstChoice beats industry funds on fees

The Assistant Treasurer and Minister for Financial Services, Bill Shorten (pictured), is understood to have been fully briefed on the changes to Colonial First State’s (CFS’s) FirstChoice Wholesale platform, which have resulted in it offering lower fees than industry superannuation funds.

Announcing the radically revamped platform arrangements, CFS chief executive Brian Bissaker expressed the hope that it might put an end to what he regarded as the fruitless debate about the fees charged by industry superannuation funds and retail offerings.

To that end, CFS has been provided with an analysis by independent specialist superannuation consultancy Chant West confirming that FirstChoice Wholesale Personal Super has lower fees than both the average industry fund and the average retail fund, based on an average account balance of $25,000.

He said the revamped product had been launched in response to the Government’s reform agenda flowing out of the Cooper Review into superannuation and the Future of Finance Advice (FOFA) changes.

“The investment and enhancements we have made to our FirstChoice platform have effectively neutralised the fee debate and raised the bar on both the value and type of services that should be delivered to investors,” he said.

Bissaker and other CFS executives said the company had been able to drive down the underlying costs finding substantial back-end efficiencies.

The formal CFS announcement said the FirstChoice Wholesale platform would have no upfront or trail commissions and had total fees starting from 0.40 per cent with an average of around 0.89 per cent across its 119 investment options.

The changes also see lower investment minimums with a starting point of $1,500 for personal super.

CFS’s newly appointed general manager of advice, Marianne Perkovic, said the response from advisers to the new arrangements had been very positive.

Among the enhancements included in the FirstChoice revamp are additional options including emerging markets, alternatives and global infrastructure securities.

Allied to the work on FirstChoice, the revamp has also seen enhancements to FirstWrap with the minimum investment contribution being lowered from $250,000 to $20,000.