Commonwealth Bank investors have questioned the pairing of high-value funds management operations with risky advice and mortgage broking units, but have more broadly welcomed the split of $8 billion worth of wealth businesses into a separate company.
Hugh Dive, founder and chief investment officer of Atlas Funds Management, said he “wouldn’t be surprised” to see CFS Group spin off the financial planning and mortgage broking units before the demerger.
“Whilst Colonial, the funds management business and the platforms, are very good, people will discount the value of the financial planning business,” he said.
“Financial planning is not a great business to be in. Your assets walk out the door every day … the clients have a great relationship with the planner, not with the funds management house.”
Mr Dive, however, said the chances of capital return as a result of an IPO “struck me as a very low probability outcome”.
“That was a supposed disappointment, but we didn’t factor that [capital relief] as a factor at all,” he said.
Commonwealth Bank’s CFS planning, broking arms ‘basically up for sale’
Commonwealth Bank investors have questioned the pairing of high-value funds management operations with risky advice and mortgage broking units, but have more broadly welcomed the split of $8 billion worth of wealth businesses into a separate company.