Colonial First State

Last updated

Colonial First State
FormerlyFirst State Fund Management (1988–1994)
State Bank (1994–1996)
Colonial State Bank (1996–2000)
Company typeSubsidiary
IndustryFinancial Services
FoundedAugust 1988 (First State)
23 November 1994 (Bank)
23 September 1996 (CFS)
Headquarters
Sydney, New South Wales
,
Australia
Key people
Clive van Horen - CEO
ProductsInvestment, Superannuation and Retirement
AUM AU$147.4 billion (July 2023) [1]
Parent KKR (55%)
Commonwealth Bank (45%)
Website www.cfs.com.au

Colonial First State (CFS), is an Australian wealth management group that provides investment, superannuation and retirement products to individuals and corporate and superannuation fund investors. [2]

Contents

History

The company was established in 1988 when the State Bank of New South Wales created First State Fund Management as a subsidiary. In 1994, Colonial Mutual acquired the State Bank of New South Wales from the NSW Government, and on 23 September 1996 the merged entity was rebranded as Colonial State Bank, with First State Fund Management being branded as "Colonial First State" (CFS). [3] [4] [5] CFS demutualised in 1997 and in 2000, it was acquired by the Commonwealth Bank, with the Colonial State Bank division being merged into the Commonwealth Bank.

In May 2020, owner Commonwealth Bank announced that, subject to gaining approval from the Australian Prudential Regulation Authority and Foreign Investment Review Board, it would sell a 55% interest in the business to KKR. [6] [7] The transaction was completed in November 2021. [8] On 1 December 2021, CFS became a standalone company.[ citation needed ]

CFS announced its commitment on climate change, aligning CFS to the goals of the Paris Agreement and committing to net zero emissions by 2050 and to a 30 per cent reduction in Greenhouse Gas emissions from 2019 levels for its investment portfolios. [9]

Controversies

In 2020, the Australian Securities and Investments Commission (ASIC) commended legal proceedings against Commonwealth Bank and CFS in relation to alleged conflicted remuneration of $22 million paid by CFS to Commonwealth Bank for the distribution of a super product issued by CFS. In 2022, the Federal Court of Australia dismissed the case and in 2023 dismissed an appeal by ASIC. [10]

In 2021, the Federal Court of Australia fined CFS $20 million for misleading superannuation members, resulting in CFS paying $67 million to remediate losses to 5,815 members. The court found that:

In 2022, CFS settled a $56.3 million class action lawsuit with Maurice Blackburn for allegedly failing to transfer beneficiaries’ accrued default amounts to a MySuper as soon as reasonably practicable, however, the settlement came with no admission of liability or wrongdoing by CFS. [12]

In 2023, CFS settled a $100 million class action lawsuit with Slater & Gordon for allegedly raising fees on superannuation members to fund ongoing commissions to financial advisers, however, the settlement came with no admission of liability or wrongdoing by CFS. [13]

Related Research Articles

A pension fund, also known as a superannuation fund in some countries, is any program, fund, or scheme which provides retirement income.

<span class="mw-page-title-main">Commonwealth Bank</span> Australian multinational bank

The Commonwealth Bank of Australia (CBA), or CommBank, is an Australian multinational bank with businesses across New Zealand, Asia, the United States, and the United Kingdom. It provides a variety of financial services, including retail, business and institutional banking, funds management, superannuation, insurance, investment, and broking services. The Commonwealth Bank is the largest Australian listed company on the Australian Securities Exchange as of August 2015, with brands including Bankwest, Colonial First State Investments, ASB Bank, Commonwealth Securities (CommSec) and Commonwealth Insurance (CommInsure). Its former constituent parts were the Commonwealth Trading Bank of Australia, the Commonwealth Savings Bank of Australia, and the Commonwealth Development Bank.

<span class="mw-page-title-main">Treasurer of Australia</span> Australian government minister in charge of economic policy

The treasurerof Australia, also known as the Federaltreasurer or simply the treasurer, is the minister of state of the Commonwealth of Australia charged with overseeing government revenue collection, federal expenditure and economic policy as the head of the Department of the Treasury. The current treasurer is Jim Chalmers, who was appointed by Prime Minister Anthony Albanese in May 2022 following the 2022 Australian federal election.

Banking in Australia is dominated by four major banks: Commonwealth Bank, Westpac, Australia & New Zealand Banking Group and National Australia Bank. There are several smaller banks with a presence throughout the country which includes Bendigo and Adelaide Bank, Suncorp Bank, and a large number of other financial institutions, such as credit unions, building societies and mutual banks, which provide limited banking-type services and are described as authorised deposit-taking institutions (ADIs). Many large foreign banks have a presence, but few have a retail banking presence. The central bank is the Reserve Bank of Australia (RBA). The Australian government’s Financial Claims Scheme (FCS) guarantees deposits up to $250,000 per account-holder per ADI in the event of the ADI failing.

Superannuation in Australia or "super" is a savings system for workplace pensions in retirement. It involves money earned by an employee being placed into an investment fund to be made legally available to fund members upon retirement. Employers make compulsory payments to these funds at a proportion of their employee's wages. From July 2023, the mandatory minimum "guarantee" contribution is 11%, rising to 12% from 2025. The superannuation guarantee was introduced by the Hawke government to promote self-funded retirement savings, reducing reliance on a publicly funded pension system. Legislation to support the introduction of the superannuation guarantee was passed by the Keating Government in 1992.

Australian Transaction Reports and Analysis Centre (AUSTRAC) is an Australian government financial intelligence agency responsible for monitoring financial transactions to identify money laundering, organised crime, tax evasion, welfare fraud and terrorism financing. AUSTRAC was established in 1989 under the Financial Transaction Reports Act 1988. It implements in Australia the recommendations of the Financial Action Task Force on Money Laundering (FATF), which Australia joined in 1990.

CommSec is Australia's largest online stockbroking firm. It is a subsidiary of the Commonwealth Bank.

The Future Fund is an independently managed sovereign wealth fund established in 2006 to strengthen the Australian Government's long-term financial position by making provision for unfunded superannuation liabilities for politicians and other public servants that will become payable during a period when an ageing population is likely to place significant pressure on the Commonwealth's finances. As of December 31 2023, the fund has $272.3 billion in assets under management.

An industry superannuation fund are Australian superannuation funds that historically were established by Australian trade unions to manage retirement savings for workers in their industry. Funds other than industry funds are referred to as 'retail funds'.

Sunsuper Superannuation Fund (Sunsuper) was an Australian public offer industry superannuation fund based in Brisbane, Queensland, Australia. It was established in 1987 as a multi-industry superannuation fund open to all workers and is profit-for-members. Sunsuper was the largest superannuation fund by membership in Queensland, with 1.3 million members and over 100,000 default employers. As at December 2020, it had more than A$79 billion in funds under management.

The four pillars policy is an Australian Government policy to maintain the separation of the four largest banks in Australia by rejecting any merger or acquisition between the four major banks. The policy, rather than formal regulation, first articulated in 1990, reflects the competitive concerns of more concentration as well as the broad political unpopularity of further bank mergers. A number of economically liberalist commentators have argued that the "four pillars" policy is built upon economic fallacies and works against Australia's better interests.

<span class="mw-page-title-main">Australian corporate law</span>

Australian corporations law has historically borrowed heavily from UK company law. Its legal structure now consists of a single, national statute, the Corporations Act 2001. The statute is administered by a single national regulatory authority, the Australian Securities & Investments Commission (ASIC).

<span class="mw-page-title-main">Westpac</span> Australian multinational bank

Westpac Banking Corporation, known simply as Westpac, is an Australian multinational banking and financial services company headquartered at Westpac Place in Sydney, New South Wales.

<span class="mw-page-title-main">Storm Financial</span>

Storm Financial Limited was a financial advice company, based in Townsville, Queensland, Australia. The company was founded by Emmanuel Cassimatis and his wife Julie Cassimatis as a private company initially with the name Cassimatis Securities Pty Ltd on 23 May 1994. As part of the company's expansion outside of Townsville the company changed its name from a personality based name to ozdaq Securities Pty Ltd on 10 April 2000. This name remained intact until 1 February 2004 when it was relinquished consequent to trademark objections from the Nasdaq stock exchange in the United States. The company then traded as Storm Financial Pty Ltd from 2 February 2004 until 14 June 2007 at which time the company became an unlisted public company and continued trading as Storm Financial Ltd from 15 June 2007 in preparation for making an initial public offering (IPO) in December 2007. This IPO was subject to a Storm Financial Prospectus which was dated 14 November 2007 and lodged with the Australian Securities & Investments Commission (ASIC) on the same date. Storm Financial Ltd continued to trade until external administrator Worrells Solvency and Forensic Accountants were appointed on 9 January 2009. The main creditor Commonwealth Bank appointed receivers and manager KordaMentha on 15 January 2009.

<span class="mw-page-title-main">First Sentier Investors</span> Australian Investment management company

First Sentier Investors, formerly known as Colonial First State Global Asset Management in Australia and First State Investments elsewhere, is a global asset management business that manages US$146.2 billion in assets managed on behalf of institutional investors, pension funds, wholesale distributors, investment platforms, financial advisers and clients worldwide. First Sentier Investors provides active, specialist investment capabilities managed by a group of independent investment teams. They take a long-term approach to investment with a focus on preserving capital and performance through market cycles.

Aware Super is an Australian superannuation fund headquartered in Sydney, New South Wales. With $150bn under management and over 1 million members, it is Australia's third-largest superannuation fund.

The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, also known as the Banking Royal Commission and the Hayne Royal Commission, was a royal commission established on 14 December 2017 by the Australian government pursuant to the Royal Commissions Act 1902 to inquire into and report on misconduct in the banking, superannuation, and financial services industry. The establishment of the commission followed revelations in the media of a culture of greed within several Australian financial institutions. A subsequent parliamentary inquiry recommended a royal commission, noting the lack of regulatory intervention by the relevant government authorities, and later revelations that financial institutions were involved in money laundering for drug syndicates, turned a blind eye to terrorism financing, and ignored statutory reporting responsibilities and impropriety in foreign exchange trading.

The Australian Financial Complaints Authority or AFCA is an external dispute resolution (EDR) company for consumers who are unable to resolve complaints with member financial services organisations. It is operated as a not-for-profit company limited by guarantee and was authorised in 2018 by the then Minister for Revenue and Financial Services, Kelly O'Dwyer, in accordance with the Corporations Act 2001 (Cth).

The Australian Retirement Trust (ART) is an Australian superannuation fund headquartered in Brisbane, Queensland. It has $230bn under management and over 2 million members, making it Australia's second-largest superannuation fund.

In Australia, the term 'Retail superannuation fund' refers to a superannuation provider that is not an Industry superannuation fund, and so weren't established by a trade union as a method of managing worker retirement savings.

References

  1. ↑ "Colonial First State delivers double-digit returns for MySuper members in FY23". Colonial First State. 20 July 2023. Archived from the original on 9 November 2023. Retrieved 29 March 2024.
  2. ↑ "CBA ASX announcement: Divestment of global asset management business" (PDF). firststateinvestments.com. 31 October 2018. Retrieved 19 March 2019.
  3. ↑ Flint, Jeremy (30 August 1996). "Colonial's State Bank gets ready for a new name". The Sydney Morning Herald. p. 23.
  4. ↑ Verrender, Ian (23 September 1996). "Change of name for the State Bank lacks note". The Sydney Morning Herald. p. 3.
  5. ↑ Hornery, Andrew. "Yawns all round for bank revamp". The Sydney Morning Herald. p. 2.
  6. ↑ "CBA announces agreement to sell 55% stake in Colonial First State to KKR". www.commbank.com.au. Retrieved 28 March 2024.
  7. ↑ "Colonial First State Leadership Team Update :: Colonial First State". web.archive.org. 5 July 2021. Archived from the original on 19 July 2021. Retrieved 28 March 2024.
  8. ↑ "Completion of sale of 55% interest in Colonial First State to KKR". www.commbank.com.au. Retrieved 28 March 2024.
  9. ↑ "Colonial First State commits to net zero by 2050". Colonial First State. 28 October 2021. Archived from the original on 5 November 2023. Retrieved 28 March 2024.
  10. ↑ "23-222MR Full Federal Court dismisses ASIC appeal but clarifies conflicted remuneration provisions". asic.gov.au. Retrieved 28 March 2024.
  11. ↑ "21-276MR Colonial First State to pay $20 million penalty for misleading superannuation members". asic.gov.au. Retrieved 28 March 2024.
  12. ↑ "NOTICE OF PROPOSED SETTLEMENT" (PDF). Maurice Blackburn. 2 May 2022. Retrieved 29 March 2024.
  13. ↑ "CBA's former wealth arm settles class action for $100m". Australian Financial Review. 14 July 2023. Retrieved 28 March 2024.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.