Anti-bank sentiment tars fund managers

Some of the community anger directed towards the Commonwealth Bank of Australia (CBA) after its Melbourne Cup day rate hike appears to have trickled down to the funds management arm of the business.

Professional Investment Holdings (PIH) held its annual general meeting and strategic review in Queensland last Friday. PIH managing director Grahame Evans said the day was attended by around 350 people, including advisers, accountants and their support staff, as well as a number of funds management and insurance representatives.

Evans said there was much debate about Australian banks, following the 0.45 per cent rate rise undertaken by CBA earlier in the week. Evans said some of the anger felt by advisers and accountants towards CBA for the move — almost double that of the Reserve Bank of Australia, and as yet not followed by its competitors — had been directed towards representatives from CBA funds management subsidiary Colonial First State (CFS).

Evans said there had been “a few verbal blows, a few words said to people from CFS about the bank”.

Evans said while PIH worked closely with the financial services arms of all the big banks, he acknowledged there had been some push-back from advisers given the actions taken by the banks since the global financial crisis, with CBA being the most aggressive.

“You get this push from advisers — which is obviously coming from some of their clients as well — as to why should we be investing or insuring with these people when they do what they do?”

“That’s going to be an interesting battle as we move forward.”

Evans described the knock-on effects to businesses such as CFS as unfortunate.

“[CFS chief] Brian Bissaker runs a great business and they’re a great bunch of people there,” Evans said.

“[The knock-on effect] is not a good thing — but it’s just the way people think about that decision by CBA.”