CFS to axe grandfathering on MIFs from 1 March

Colonial First State (CFS) will move ahead of the Government’s deadline and cease paying grandfathered conflicted remuneration to advice licensees on its Managed Investment Funds from 1 March, next year.

CFS has issued a formal statement that it is working to eliminate all remaining grandfathered conflicted remuneration in a phased approach, to be completed by mid-2020 and that it is also continuing work to simplify fees for its members. 

The Commonwealth Bank subsidiary said that in conjunction with the ending of grandfathered remuneration, it was simplifying its fee structure – a measure which would deliver a total reduction of between 0.55% per annum and 1.10% per annum (depending on the investment option) or approximately $280 per annum, on average to around 70,000 members. 

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The statement said the changes followed improvements to CFS’s digital channels for members, enhanced reporting and significant fee reductions made earlier this year across its superannuation and investment platforms that reduced the cost of investment for over 500,000 members – changes it believed would result in a total benefit to members of approximately $68 million per year.

Commenting on the move, CFS general manager of products and marketing, Kelly Power said the changes were part of CFS’ commitment to improving its products, continuing to put member outcomes first and help create a better super system. 

“We’re committed to providing early notice to advisers of these changes and helping them plan and prepare for their implementation, which will deliver better outcomes for our members,” she said. “We strongly believe that a more viable and sustainable superannuation system is vital to providing better retirement outcomes for Australians today and in the future.”

“We remain a strong advocate for financial advice and support the role that financial advice plays in helping Australians achieve financial wellbeing. We will work closely with advisers and our members to help them prepare for the changes ahead,” Power said.

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