Many of our clients will have received a communication from CBA concerning the potential sale of Colonial First State (CFS) to KKR – 55%. This was not an unexpected announcement given that CBA had previously stated that their strategic direction was to focus on their core banking activities and divest themselves of their wealth management arm, including CFS.
This process had already commenced with the closure of our previous licensee, Financial Wisdom and the sale of Count, another Licensee. They had also sold their international arm GWAM late last year.
Infact, the previous strategy announced internally by CBA had been to list CFS as a separate entity on the stock exchange. Unfortunately for CBA, the Royal Commission put such a negative connotation on the prospect that they had to shelve the idea.
As CBA stated this shouldn’t mean any change to individual investors in the shorter term. And, potentially over the longer term it could mean significant improvement to the product set of CFS and the services that they provide. KKR are one of the largest investment businesses in the world and could bring considerable investment and expertise to the platform. For those that are interested KKR comes from the founders of the investment firm, Kohlberg Kravis Roberts, which is a global business with close to $148 billion dollars under management.
From our perspective, however, it does mean that our ongoing commitment to ensuring our clients are placed in the most appropriate platform now comes more sharply into focus. We will obviously review our offering to our clients taking all aspects into consideration.
If you do have any concerns, please call Jamie Luxton or your Adviser on (08) 9380 6333 and we will be happy to discuss further.