Fund Product, Company and Regulatory Updates as at 26 May 2020
/_
Product Updates
Referral program for super funds, accountants and services with dealer groups launched
Greg Harper, former Cbus head of advice, has launched a national referral service to connect superannuation funds, accountancy firms and other services providers with financial planning dealer groups: fpCentral. The new service is offered by Financial Advice Services Institute (FASI), which is Harper’s company, to connect everyone via an online platform. FASI is currently accepting registrations of interest.
Challenger launches new retirement tool
A new tool, Retire with Confidence, is set to help retirees and pre-retirees improve their understanding of their retirement income options. Topics covered include age pension expectations, the longevity of retirement income, and different investment vehicles.
Russell adds new retirement service from fund member research
Russell Investments completed a survey of around 3,000 working Australians, with the results supporting the launch of an investment strategy for those nearing or in retirement. The new service allows superannuation funds of any size to add member advice via an automated platform to improve and personalise asset allocation strategy.
Martin Currie launches sustainable equity strategy
Legg Mason-run boutique, Martin Currie, has launched a sustainable equity strategy - Martin Currie Australia Sustainable Equity Strategy - using proprietary sustainability analysis, versus simple negative screening. The strategy will be managed by Will Baylis, Naomi Bant and Matt Lambert. The strategy will have some exclusions, but is focusing on companies that do more benefit than harm to society, focus on sustainability, and have a clear pathway towards an ESG-friendly future.
Saxo Markets launches loyalty program
Investment specialist Saxo Markets has launched a loyalty program offering investors rewards for trading across asset classes. The scheme is to be available to all Australian clients, with trades costing $6.99 for Australian shares and US$3 for US shares. Reward points are earnt for all qualifying trades, with different amounts of points for various types of trades.
_
Company Updates
CBA sells half of CFS
Commonwealth Bank of Australia (CBA) is to sell 55 per cent of Colonial First State to a global investment company KKR, as announced on the ASX. An agreement has been entered into for the sale, with a value of $3.3 billion. CBA will retain its 45 per cent stake in the business.
_
Regulatory Updates
Merging super fund tax relief to stay
A new bill has easily passed through parliament to ensure tax relief granted to merging superannuation funds is now permanent, rather than temporary as it was. Previously, super fund members may have faced a capital gains tax liability if their fund merged. CGT rollover relief was a temporary measure to reduce that liability, which had been extended multiple times.
Westpac files defence in Federal Court for AUSTRAC allegations
Westpac has said it accepts the gravity of the issues raised by AUSTRAC claims and has made many admissions of failures in its defence, filed with the Federal Court. The failures admitted to include non-reporting of international fund transfer instructions (IFTIs) and failure to trace associated information. The law requires IFTIs to be reported to AUSTRAC within 10 days of the transaction taking place. Other admissions include record-keeping issues, due diligence failures, and problems with some correspondent banking obligations.
It is alleged that Westpac breached anti-money laundering and counter-terrorism laws over 23 million times. Westpac’s chief executive, Peter King, is expected the costs associated with AUSTRAC proceedings to hit over a billion dollars.
Liquidation funders to hold AFS licences
Litigation funders will soon be required to hold an Australian Financial Services (AFS) licence. Litigation funders are currently exempt from holding an AFS licence, however, the government wants these groups to have greater regulatory responsibility and the government to have greater oversight. The amendments to the Corporations Act will come into play in three months. Litigation funders have supported the move.
ERS withdrawals hit $10bn
More than $10 billion has been removed from Australians’ superannuation accounts under the government’s Early Release of Super scheme. Just over 10 of the superannuation funds have dispensed 70 per cent of the money. Payments have taken an average of 3.3 business days to pay with 94 per cent made within five days. Over 1.41 million payments have been made under the scheme.
IOOF settles class action
An announcement on the ASX reveals IOOF has settled the class action brought by Quinn Emanuel Urquhart & Sullivan in April 2019. The class action alleged IOOF had engaged in misleading or deceptive conduct, with executives aware of the conduct and that IOOF Investment Management and Questor Financial Services breached their duties as superannuation trustees.
Shareholders who bought stock between 27 May 2015 and 6 December 2018 saw the stock price fall by 35 per cent when the Australian Prudential Regulation Authority (APRA) launched legal proceedings against IOOF and five of its directors in December 2018. The allegations are of conduct breaching continuous disclosure obligations under the Corporations Act.
IOOF has reached an agreement, with three parties: the law firm, plaintiff and the funder, Regency Group, to discontinue the case with no order as to costs. No payment is required by IOOF to either of the other two parties.
AMP launches new ESG-focused managed portfolio via MyNorth
AMP and Pendal have launched a new managed portfolio via MyNorth, with an ESG focus, the MyNorth Sustainable Managed Portfolio. The new portfolio is one of the first of its kind on a wrap platform in Australia. The major themes of the portfolio are transitioning to a low-carbon economy, avoiding thermal coal, tobacco, gambling, pornography and controversial weapons, while encouraging sustainable, positive social and environmental outcomes for the community.
