‘Neutralising fee debate’ is the nice way to say it Last month, the chief executive of Colonial First State, Brian Bissaker, broke bread with a bunch of journalists for the first time in his four-year reign. The retail veteran was about to announce a 98.5 per cent reduction in the minimum investment for Colonial’s FirstChoice platform , but overt aggression is never a good look in financial services. One can imagine the self-coaching that went on in the mirror beforehand. “Do not…mention the war.” Straighten tie. “Do not…mention the industry funds.” Remember not to shoot cuffs. Or Cuffe, for that matter…UniSuper’s sort of an industry fund, right? And so it was that over lunch, Bissaker positioned his bold grab for the mum-and-dad superannuants as “neutralising the fee debate”, rather than the face-off with Melbourne’s finest that it clearly was (at least to some of the more excitable journalists present).

One hopes the Industry Super Network was careful what they wished for all those years ago, because now they’ve got it. Price and performance have been the two areas where the notfor- profits traditionally claimed superiority over retail. However, now that the long-running campaign against trailing commissions has finally succeeded – and the master trusts have unhooked their product fees from any advice fee – the products themselves cost basically the same if there’s no friendly financial planner in the picture. To be honest, the Colonials at the lunch didn’t seem too fussed about how the new-generation First Choice Wholesale, with its minuscule minimum investment of $1500, would be sold. Whether it’s via an adviser or not, Bissaker admits he needs to get plenty of middle Australia through the door, to make up for the fact there will be a lot more marginal accounts to service than in the days of the $100,000 minimum.

It wasn’t mentioned over lunch, but you’d have to think that Colonial’s parent Commonwealth Bank will eventually follow what Westpac has done with BT Super For Life, and risk adviser ire by selling First Choice Wholesale over the counter at branches. BT Financial Group’s head of superannuation, Mel Evans, reckons 75 per cent of inflow to Super for Life is driven by the tellers. Is it any surprise that Members Equity and industry funds are now opening branches as well? The big difference in the armouries of the two combatants is now asset allocation. The retail crowd still avoid unlisted investments like the plague, even though AMP and Colonial in particular have sister funds management companies bulging with expertise in things such as direct property and infrastructure. Bissaker’s crew place an emphasis on getting the daily unit price exactly right, and point to the inequities created by holding assets which are only re-valued once a year.

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