The CommonwealthBank (CBA) has restructured its business operations, drawing together the wealth management and insurance operations for the first time since the merger with the Colonial group.
The restructure will result in the funds management operations of Colonial First State, as well as that of Commonwealth Investment Managers, both operating out of the same division within the bank.
However, the Commonwealth has denied that the two operations will be combined but will continue to operate as separate entities within the local market.
Head of Colonial First State Investments Group Peter Polson will manage the new investment and insurance division, which will include funds management, master funds, superannuation and insurance business, as well as support services for third party brokers, agents and financial advisers working with the group.
The chief executive of Colonial First State’s Australian operations, Chris Cuffe, will remain in his role and continue to report through to Polson, while Nick Basile, the head of Commonwealth Investment Management, will now also report through to Polson.
“The Commonwealth will continue to maintain Colonial, as it wanted to build an investment brand. Now that is has done so, the need to keep the two separate is not as strong but it has shown a model in financial services which convinced the bank to run it through the whole group,” Polson says.
The realignment of businesses was quietly announced to the Australian Stock Exchange just before Christmas by the bank’s managing director, David Murray, who said the bank would be realigned along four new business divisions reflecting product development and service delivery segments.
These four divisions would cover retail banking, premium financial services, investment and insurance, and institutional and business services, and would be completed by the end of February.
CBA spokesperson Bryan Fitzgerald says the premium financial services would be managed by Michael Katz, formerly the head of institutional banking.
It would draw together the private client services of the two groups. The overall restructure is the final phase of the merger between the Commonwealth and Colonial groups.
“The financial advice and funds management markets are going to be strong businesses for us and this is already evident in the drop away from traditional banking products which is occurring in the middle market,” Fitzgerald says.
Colonial’s autonomous financial planning group Financial Wisdom will also remain, Polson says, but discussions were ongoing as to which Commonwealth/Colonial planners would be moved into the premium financial services division.
