Colonial First State focuses on private markets for its Edge platform

Colonial First State is gearing up for the next phase of its wealth platform expansion as it seeks to give advisers and their clients access to private markets investments.

CFS Super chief executive Kelly Power.

Colonial First State is gearing up for the next phase of its Edge wealth platform expansion as it seeks to give advisers and their clients access to private markets investments.

CFS Super chief executive Kelly Power said technology was helping to open the door for retail investors and advisers to access private markets, and the wealth manager wanted to broaden its offering.

“We can see some really big opportunities (in the US) in the private asset space,” Ms Power said.

“Getting access to private investments is very challenging in Australia because typically they’re only open to large institutional investors. But there’s some great technology emerging that’s looking at fractionalising those types of assets, providing liquidity around those structures in private credit, private equity and private infrastructure.

“Providing more access to a much broader range of assets for retail investors and advisers will be a big focus for us.”

CFS’ wealth platform, CFS Edge, was launched last August in order to capture a greater share of the $1 trillion platform market. Just under 10 months later and CFS Edge has reached $1bn in funds under advice, recording the fastest push to $1bn of any platform, the wealth manager said.

While private markets have traditionally been closed off to retail investors, they are starting to open up to this segment of the market. The potential for higher returns, as well as the diversification benefits and improved liquidity options have broadened their appeal.

“There’s good returns to be had in some of these asset classes. Particularly if your time frame out to retirement is 10 years-plus, it makes a lot of sense to give access to all types of investors the returns and diversification opportunities those asset classes provide,” Ms Power said.

“Typically accessing private equity investment has been challenging for retail investors, that’s one issue. Number two is creating a structure where you can have liquidity around them.”

The opportunities in the US come from companies investing in blockchain technology to work out how to improve liquidity and access for small investors, she said.

“(They are looking) to tokenise and fractionalise aspects of those assets and so on. So there’s a lot of new capabilities coming out of the US and, for us, it’s a great opportunity to integrate with those because of the platform,” she said.

Ms Power said Edge had strengthened CFS’ position in the market.

“CFS has built deep relationships with financial advisers over many years. Those relationships have been pivotal to the rapid growth of CFS Edge in such a short space of time. We have built an integrated platform that puts advisers in the driver’s seat,” she said.

“Edge advisers and their clients are uniquely positioned to continue benefiting from global expertise, ongoing R&D, and the unparalleled pace of innovation that only comes from global scale coupled with CFS’ deep understanding of the Australian market.”

Developed in partnership with advisers and global platform technology operator FNZ, Edge has added financial advice groups, including Viridian Advisory and Emmanuel Whybourne & Loehr in recent months. To date, more than 2200 registered advisers, 1600 support staff and 380 licensees are on the platform.