After just 200 business days in operation, CFS Edge has achieved $1 billion in funds under administration, with none of that coming at the expense of its FirstChoice platform.
CFS Superannuation CEO Kelly Power says partnerships with advice practices have been the driver for flows.
BT stalwart Viridian Advisory, which CFS touted as a “cornerstone client” late last year, along with Emanuel Whybourne & Loehr, are among the more than 380 licensees that have registered to use the platform.
“It’s a real mix of different types of advice business and ones that are brand new to CFS,” Power tells Professional Planner.
The new platform, announced in early 2022, was funded by a cash injection from private equity firm KKR, which took majority ownership of CFS from Commonwealth Bank in late 2021.
“This is one of the largest transformations we’ve committed to since KKR’s 55 per cent ownership of CFS and an important part of broader transformation program,” Power says.
Power says CFS will continue to support FirstChoice along with Edge – the former will remain focused on retirees in decumulation mode, whereas the latter will offer more active adviser management through managed accounts.
“We’re supporting both of our platforms. We think they service important segments of the market, and quite distinct segments of the market,” Power says.
“We see significant support continue for FirstChoice. It’s an incredibly important part of our business and we continue to invest in it. We’ve completed the Elemnta [integration] which is the data feeds, and we’ll continue to invest in supporting FirstChoice.”
CFS Edge: Key data
| Total FUM | > $1 billion |
| Registered advisers | > 2200 |
| Registered support staff | > 1600 |
| Licensees | 380 |
Source: CFS
Power says she hasn’t thought about the next milestone for Edge.
“I’m just enjoying this one,” she says.
The biggest challenge Power sees for platforms, and for the sector as a whole, is supporting investors through potentially turbulent markets in the next six to 12 months.
“One of things we’re focusing on quite a bit is how we ensure we’re supporting our members and our advisers with information during this period of volatility and also appropriate choices for people that want to de-risk,” Power says.
The next headwind platform providers face is the Quality of Advice Review reforms, with legislation for mandatory uniform fee consent and rules for the oversight of advice deductions sitting before parliament.
Power raised no issue with the progress or content of the legislation, despite industry concerns over the latter.
“Like anyone in the industry, we’ll review our processes as things come to light,” Power says.
“The intent is to make advice more accessible and affordable. I am very hopeful that is the outcome and that we’re actually reducing what is an incredible amount of paperwork and red tape relating to the provision of advice.”
However, Power says a bigger focus for the wealth provider is phase two for the QAR reforms that give fund the ability to give more advice which she says will drive “fundamental change”.
“Very keen to see that go through as soon as possible and highly supportive of that package,” Power says.
Power says the challenge for the platform provider is dealing with members aged over 55 who are near retirement and have questions over investments, downsizer contributions or optimising aged pension entitlements.
“They’re questions we typically can’t answer, typically they don’t have enough money to warrant for an adviser to do a full comprehensive financial plan,” Power says.
“That is a big issue because those people would really benefit from someone sitting down and helping them work out how to maximize their age pension entitlements. That is the core problem we’re seeing in our membership and that’s something we’d like to see addressed in that package.”
Many of these members were previously advised and now, without that access to advice, are left to ask the platform whether they’re in the right investment strategy.
“They’ve gone through the retirement journey, they don’t need full advice but they’re looking for some support around investment,” Power says.
“Again, challenging to provide under the current regulatory regime. Then we also have younger clients – we see the demand for advice right across the age spectrum. This is not just a previously advised issue this is broad issue around Australians looking for more help.”
