ASB has exported its investment administration back to Australia as well as implementing a raft of other fund changes to the group’s $7 billion plus fund business.
In just-published documents for its KiwiSaver, Easyfunds and Superannuation Master Trust products, the Commonwealth Bank of Australia-owned ASB confirmed the group has dumped NZ entity Sovereign in favour of its parent Australian-based Colonial First State Investments (CFSI) to provide investment admin. The change was effective at the end of October last year.
As at March last year, ASB’s fund division, ASB Group Investments, managed over $7.2 billion across the three investment products including almost $5 billion in the bank’s KiwiSaver scheme – the single-largest in the market.
Previously, the Commonwealth Bank (CBA) paid Sovereign Services – a subsidiary of ASB-owned insurance firm Sovereign Assurance (now subsumed under ASB Life) – $2 million per annum for providing investment admin to the products.
The ASB scheme documents also reveal the group has amended an investment consulting agreement with Mercer as well as changing an investment advisory deal with another Australian-based CBA offshoot, Colonial First State Asset Management (CFSM).
ASB was not available to explain the changes by Investment News NZ publication time.
However, the fund documents list a range of further tweaks to the ASB investment products including changing the scope of its currency hedging policy and amending some underlying benchmarks.
Furthermore, ASB has limited access to both its Super Master Trust and three of its eight EasyFunds products in response to regulatory changes.
As at March 24 this year ASB barred retail investors from the EasyFund global equity, bond and property funds with only wholesale clients and discretionary investment management services (DIMS) licensees getting a look in.
ASB EasyFunds offer investors access to a range of passive products with investment management outsourced to CFSAM, State Street and Vanguard. As at March last year, the EasyFunds range collectively managed just over $1 billion.
Additionally, the ASB Super Master Trust has given notice it would close off to ‘ordinary’ and ‘trustee’ members once the group earns its Financial Markets Conduct Act (FMC) licence.
Ordinary members are individuals who apply directly to join while trustee members belong to any registered super or KiwiSaver scheme.
According to the Super Master Trust prospectus, only ‘specified’ members’ – as defined in the trust deed – will be accepted “on or after the date the manager elects for the [FMC] to apply…”.
“This election will be made prior to 1 December 2016,” the prospectus says.
The approximately $1.2 billion ASB Master Trust along with similar products offered by AMP, Aon, Fisher, Mercer and SuperLife stand to benefit as employer-based super schemes exit the market prior to the FMC deadline.
Graeme Edwards, ASB general counsel, is interim head of ASB Group Investments following the departure of incumbent Nick Stanhope last month. Stanhope took up the role of Sovereign chief executive in March.