CFS and the value of not providing holistic advice
Colonial First State (CFS) spent $5,500,410.68 delivering intrafund advice in 2019, with an average cost to members of its superannuation funds of $20.71.
This was down slightly on its experience in 2018 when it spent $6,289,062.69 on intrafund advice, at an average cost to members of $22.09 each.
Yet, according to evidence delivered by CFS to the House of Representatives Standing Committee on Economics it did not provide comprehensive advice over the period and did not employ financial planners.
This, of course, overlooked the relationship between CFS and the Commonwealth Bank and the role played by the CFS platforms.
The CFS answers to questions on notice from the committee stated: “Colonial First State Investments Limited (CFSIL) does not provide financial planning or advice (other than general advice) to members”.
“We have answered the following question on this basis,” it said. “However, we note that independent financial advisers and financial advisers under the CBA Group (related entity to CFS) use our products and platforms.”
On the issue of general advice, CFS declined to be specific.
It said “CFS has a number of customer facing staff who provide general advice as part of our wider member services offering. During the course of business, these same staff would also undertake activities that would not be considered general advice. CFS does not discreetly split these costs, therefore we cannot provide this answer”.
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