Stars revealed in platform comparisons
Commonwealth Bank/Colonial First State (CBA/CFS) has topped a list of “super star” performers in the platform space for 2005, based on research which considered a combination of relative funds under management and growth rates.
Although it did not have the largest funds under management (FUM), CBA/CFS did have significantly larger FUM than the industry average and increased its size at a greater rate than its competitors, making it the strongest performer according to analysis by PortfolioConstruction Forum using Plan for Life data.
Colonial First State chief executive officer John Pearce said the company’s success stemmed from its focus on value for money and service.
“A number of our competitors really focus on choice and making the range of options as wide as possible, but that’s not our priority. Our priority is always value and service,” Pearce said.
Others in the super star category included Macquarie, St George, AMP, and ING/ANZ.
Macquarie’s badged platforms were new additions to the super star category for 2005, with Perpetual and badged BT Wraps dropping out of the highest group into the fading star category due to below average growth rates.
Brillient! analyst Deirdre Keown said other fading stars included National Australia Bank (NAB)/MLC, BT/Westpac, AXA Australia, and Aviva.
Keown said that while the fading star platforms were maintaining double digit growth, these rates were not sufficient to keep them ahead and their competitors were catching up.
“The most interesting is NAB/MLC, a fading star for the second calendar year running. That is, while still the largest player in the platform market, its competitors are slowly but surely gaining ground on it,” Keown said.
In 2005, 13 platforms were judged to be rising stars, achieving above average growth rates from smaller FUM bases. This figure is down from 16 in 2004.
Keown said it was easier to achieve above average growth from a smaller FUM base.
“The key is whether these groups can sustain their growth to a point where they push into the super star category.”
She said Skandia, the fastest rising star in 2004, was closest to entering the super star category but its FUM remained $2.9 billion below the benchmark for the category.
She said it was also likely that Challenger Financial would overtake Skandia in 2006, having achieved excess growth three times that of Skandia with only slightly lower FUM.
The research also identified 19 platforms that had experienced below average growth along with below average FUM. These were designated “black holes”.
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