Sovereign takes marketing crown from Colonial
A major shakeup of the Commonwealth Bank group in New Zealand sees Sovereign taking over the marketing of Colonial First State Investment's (CFSI) retail funds, with the latter becoming a wholesale investment manager.
The changes have been made because the group thinks that Sovereign has better marketing and distribution skills in the advisory market, than Colonial.
In the arrangement Sovereign picks up an additional $280 million of funds under management, bringing its total to more than $3.2 billion, making it one of the largest managed funds providers in New Zealand.
The names of the Colonial First State Investment Series and Retirement Lifestyle Series will be changed to Sovereign.
While changes are being made in distribution, the various styles of the different managers will remain. ASB Bank, which is Sovereign's parent, will continue to offer passive funds to the retail market, while Sovereign will stick with its multi-manager style and CFSI will manage active funds.
"This refinement will eliminate some duplication, and maximises the advantage, specialisation and expertise each brand offers financial advisers and customers," Commonwealth Bank head of international financial services Ralph Norris says.
CFSI will remain responsible for the investment management of the funds being transferred to Sovereign.
Sovereign general manager of investments Wayne Ross acknowledges the changes will create some interesting challenges, especially as Sovereign is generally regarded as a provider of insurance products, as opposed to investments.
"It is a challenge," he says. "We don't see any reason why we can't do it effectively."
One of the advantages of having the range of funds under the Sovereign brand is that the company will be able to offer a more comprehensive range of funds than previously.
Ross says Sovereign should be seen as a financial services company, not just a life company.
Colonial First State Property NZ will continue to manage the listed property trust, and CFSI will remain part of and report directly to the international CFSI group in Sydney.
Former Colonial subsidiary Jacques Martin will continue to operate independently as a specialist fund administrator.
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