Fund Product, Company and Regulatory Updates as at 7 May 2019

Product Updates

CFS removes nine undesirables, adds three new index funds
Colonial First State is taking nine FirstChoice Investments funds off its menu after poor investor appetite. The funds remain on the CFS FirstChoice Wholesale menu.

The funds being removed are:

  • Acadian Global Managed Volatility Equity

  • Franklin Templeton Multisector Bond

  • Milliman Managed Risk Australian Share

  • Global Share Emerging Markets

  • Realindex Emerging Markets

  • Stewart Investors Worldwide Sustainability

  • CFS Multi-asset Real Return

  • FirstChoice Diversified

  • FirstChoice Multi-Index Moderate

CFS has announced that three new indexed options will be available on the FirstChoice Wholesale and Wrap Plus platforms - conservative, diversified and growth options. Fee cuts were announced in April across the FirstChoice Wholesale, FirstChoice Employer Super and FirstWrap Plus platforms, effective from June.

Tribeca partners with advisory firm to launch new Asian Credit fund
Sydney boutique Tribeca has partnered with Vanda Securities, an advisory firm, to launch the Tribeca Vanda Asian Credit Fund. John Stover, of hedge fund Farallon Capital, will manage the fund.

The fund will invest in bonds, loans and convertible securities, managed by Tribeca’s Singapore entity. Goldman Sachs will be the primary broker.

Company Updates

Equipsuper and Catholic Super to merge
A memorandum of understanding has been signed by Equipsuper and Catholic Super to set up a joint trustee board to oversee the joint venture to create a $26 billion entity.

The two super funds will eventually pool their investments, administration and offices, however in the meantime, the two will retain their individual branding. Together, the funds have 150,000 members. The savings are estimated to be $7-$10 million annually, with both profit-for-member funds.

Netwealth opens new office, makes new appointments
An Adelaide office is being opened by Netwealth, run by Andrew Dwyer, the senior distribution manager. Dwyer joins Netwealth from BT Financial Group.

Superannuation startup relaunching
In its third incarnation, Human Super is relaunching under a new name, FairVine, two years after it tried to enter the market. Human Super is a superannuation product aimed at women. Human Super tried to rebrand to BeSuper in late 2018, but the project was cancelled.

Instead, FairVine is now the new iteration. The fund is a subplan of Aracon Superannuation Fund, which is owned by Xplore Wealth. Hannover Life Re is providing the group insurance.

Regulatory Updates

ASIC appoints receivers to Berndale Capital Securities
Receivers and managers have been appointed to former over-the-counter derivatives issuer, Berndale Capital Securities Pty Ltd, and related companies (authorised representatives) Berndale Capital Securities Management Pty Ltd and Algoplus Pty Ltd. ASIC alleges that all three firms had deeply intermingled finances.

ASIC had concerns about Berndale’s financial records, handling of client monies, and adequacy of its client money reconciliation reports. Client monies were allegedly held outside of Australian authorised deposit-taking institutions in breach of legal requirements. Berndale’s Australian financial services licence was cancelled in November 2018.

IOOF fails to meet APRA’s deadline
APRA’s deadline of March 31 has not been met by IOOF - the company was supposed to establish a dedicated superannuation trustee function, to comply with licence conditions imposed by APRA in December 2018. This is a breach of their licence conditions, and as a result APRA has issued show cause notices. IOOF has until June.

AIST wants AFCA to name and shame super funds
The Australian Institute of Superannuation Trustees is calling on the Australian Financial Complaints Authority to report superannuation funds that get complained about a lot. AIST has made a submission to AFCA’s consultation paper on proposed arrangements for comparative reporting of compliant data.

In the submission, AIST says that AFCA’s proposal to include the number of accepted complaints and their outcomes did not go far enough. AIST wants individual superannuation funds to be called out publicly, because it says this information is important for consumers.