Colonial First State (CFS) is an Australian wealth management group that provides investment,

superannuation A pension (; ) is a fund into which amounts are paid regularly during an individual's working career, and from which periodic payments are made to support the person's retirement from work. A pension may be either a "Defined benefit pension pla ...

and retirement products to individuals as well as corporate and superannuation fund investors.

History

The company was established in 1988 when the State Bank of New South Wales created First State Fund Management as a subsidiary. In 1994, Colonial Mutual acquired the State Bank of New South Wales from the NSW Government, and on 23 September 1996 the merged entity was rebranded as Colonial State Bank, with First State Fund Management being branded as "Colonial First State" (CFS). CFS demutualised in 1997 and in 2000, it was acquired by the

Commonwealth Bank The Commonwealth Bank of Australia (CBA), also known as Commonwealth Bank or simply CommBank, is an Australian multinational bank with businesses across New Zealand, Asia, the United States, and the United Kingdom. It provides a variety of fi ...

, with the Colonial State Bank division being merged into the Commonwealth Bank. In May 2020, owner

announced that, subject to gaining approval from the

Australian Prudential Regulation Authority The Australian Prudential Regulation Authority (APRA) is a statutory authority of the Australian Government and the prudential regulator of the Australian financial services industry. APRA was established on 1 July 1998 in response to the recom ...

and Foreign Investment Review Board, it would sell a 55% interest in the business to KKR. The transaction was completed in November 2021. On 1 December 2021, CFS became a standalone company. CFS announced its commitment on climate change, aligning CFS to the goals of the Paris Agreement and committing to net zero emissions by 2050 and to a 30 per cent reduction in Greenhouse Gas emissions from 2019 levels for its investment portfolios.

Controversies

In 2020, the

Australian Securities and Investments Commission The Australian Securities and Investments Commission (ASIC) is an independent commission of the Australian Government tasked as the national corporate regulator. ASIC's role is to regulate company and financial services and enforce laws to pro ...

(ASIC) commended legal proceedings against

and CFS in relation to alleged conflicted remuneration of $22 million paid by CFS to Commonwealth Bank for the distribution of a super product issued by CFS. In 2022, the

Federal Court of Australia The Federal Court of Australia is an Australian superior court which has jurisdiction to deal with most civil disputes governed by federal law (with the exception of family law matters), along with some summary (less serious) and indictable (mo ...

dismissed the case and in 2023 dismissed an appeal by ASIC. In 2021, the

fined CFS $20 million for misleading superannuation members, resulting in CFS paying $67 million to remediate losses to 5,815 members. The court found that: * CFS had told its members that legislative changes required CFS to contact them to obtain an investment direction to stay in the FirstChoice Fund when that was not the case * CFS failed to tell members that if Colonial did not receive an investment direction from the member, it was required to transfer the member's superannuation contributions into a

MySuper MySuper is part of the Stronger Super reforms announced in September 2011 by the Gillard Labor government for the Australian superannuation industry to replace the previous default funds system with a new default system using low cost and simple ...

product. In 2022, CFS settled a $56.3 million

class action lawsuit A class action A class action is a form of lawsuit. Class Action may also refer to: * ''Class Action'' (film), 1991, starring Gene Hackman and Mary Elizabeth Mastrantonio * Class Action (band), a garage house band * "Class Action" (''Teenage R ...

with Maurice Blackburn for allegedly failing to transfer beneficiaries’ accrued default amounts to a

as soon as reasonably practicable, however, the settlement came with no admission of liability or wrongdoing by CFS. In 2023, CFS settled a $100 million

with Slater & Gordon for allegedly raising fees on superannuation members to fund ongoing commissions to financial advisers, however, the settlement came with no admission of liability or wrongdoing by CFS.

References

External links

Company website
{{KKR Commonwealth Bank Financial services companies based in Sydney Investment companies of Australia Kohlberg Kravis Roberts companies Asset management companies