CFS doubles down on advice pragmatics

Mike Taylor

Managing Editor/Publisher, Financial Newswire

5 November 2024

ANALYSIS

Colonial First State (CFS) has demonstrated its willingness to move ahead of the promised second tranche of the Delivering Better Financial Outcomes (DBFO) legislation by having the necessary advice infrastructure in place.

The arrangement it announced yesterday with Viridian Advisory is not revolutionary – it is simply pragmatic.

Put together with last month’s announcement of a personalised digital advice solution via Otivo it represents a commercially sensible strategy on the part of CFS to make advice available to members of its FirstChoice superannuation product.

The point CFS made with both announcements is that the offerings are aimed at FirstChoice members who currently do not have an adviser.

Thus, for $88 a year FirstChoice members can access the Otivo solution in relation to their FirstChoice investment options, contribution strategy and insurance arrangements while those looking for more can access more conventional advice via Viridian Advisory.

According to CFS, the Viridian arrangement allows FirstChoice members to access advice “in modular blocks which start at $500, with any combination of blocks capped at $3,000.

The nature of the arrangement with Viridian is not significantly different to that employed by industry superannuation funds, particularly those who have relationships with Industry Funds Financial Planning.

The CFS announcement said Viridian Advisory had been engaged given their scale, national reach and “willingness to develop an affordable, one-off and topic-based financial advice offer”

“CFS will consider expanding this approach toother licensees as demand for advice continues to growth among its members,” the announcement said.

CFS Superannuation chief executive, Kelly Power noted that the firm had a large member base that could not afford comprehensive advice.

“By introducing this new model, we are enabling our members to access affordable advice suited to their specific needs at a particular point in time,” she said.

Financial adviser critics of the CFS approach need to ask themselves whether they would be prepared to service unadvised FirstChoice members for the same or lesser fees.