Colonial First State weighs into superannuation fees debate

Colonial First State's radical revamp of its FirstChoice platform had the ambitious goal of putting an end to the "fruitless debate" surrounding the fees charged by industry super funds and their retail competitors.

1. FirstChoice

Earlier this year, Colonial First State radically revamped its FirstChoice platform arrangements, which resulted in it offering lower fees than industry superannuation funds.

CFS chief executive officer Brian Bissaker said at the time that the new offering was aimed at putting an end to a “fruitless debate” about the fees charged by industry superannuation funds and retail offerings.

The independent specialist superannuation consultancy Chant West confirmed that FirstChoice Wholesale Personal Super in fact has lower fees than both the average industry fund and the average retail fund, based on an average account balance of $25,000.

Actions certainly speak louder than words, and Colonial’s move to revamp the product has earned FirstChoice a top spot on Money Management’s Top 5 Platforms list.

It is also worth mentioning that FirstChoice has the largest number of primary financial adviser relationships in the market, with $49.1 billion in funds under management (FUM) as at June 2011 (including FirstChoice Wholesale).

2. BT Wrap and SuperWrap

BT Wrap and SuperWrap platforms have achieved positive net flows in the year ending June 2011 ($4.6 billion), which was more than could be said for the majority of big players in the market.

The platform had recently announced a $150 million investment into a new information technology system, which will allow BT’s platforms to rid themselves of the ancient technology implemented in 1997 – the year they were created.

Apart from dealer groups owned by Westpac, DKN was a big supporter of BT’s Wrap platform prior to the acquisition by IOOF. BT has confirmed it was watching the distribution land grab game closely, but stated it was confident it would remain the largest platform in the market.

3. North

Earlier this year, AXA unveiled its new North platform, which is the first full wrap owned by AMP.

Its impressive revamp and performance over the year have earned this platform a spot on the Top 5 Platforms list in 2011.

Its net inflows in the September 2011 quarter ($242 million) were double what they were the same time last year, with the platform introducing new options to investors.

Since developing into a full wrap offering, North has included direct share trading, 200 managed funds and a variety of term deposits, rather than just the guarantee.

4. MasterKey

MasterKey has around $34.6 million in FUM compared to $33.6 million during the same period last year, according to data from Plan for Life.

In November, MLC announced a major overhaul of its MasterKey Fundamentals platform, including the lowering of administration fees for balances up to $200,000 and the introduction of new investment options. 

For MLC, the platform market is falling into two distinct categories: high net worth investors and the majority investors. MasterKey Fundamentals caters for the masses, the company said.

5. Macquarie Wrap

Macquarie’s new portfolio-priced version of wrap released in May, Macquarie Consolidator, hit $1 billion in net inflows and has attracted over 900 new clients.

Macquarie is a big supporter of the independent financial adviser sector and has allowed smaller providers to access its platform, finishing the year to June 2011 in a positive territory.

Macquarie Adviser Services head of insurance and platforms Justin Delaney said the reason for the platform’s success has been due to the company’s proposition around administration, custody, and the use of technology.