group executive, investment and insurance services · 2019-07-13 · group executive, investment...
TRANSCRIPT
1
Critical Success Drivers
Commonwealth Bank
Stuart Grimshaw
Group Executive, Investment and Insurance Services
23 June 2004
www.commbank.com.au
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The material that follows is a presentation of general
background information about the Bank’s activities
current at the date of the presentation, 23 June 2004.
It is information given in summary form and does not
purport to be complete. It is not intended to be relied
upon as advice to investors or potential investors and
does not take into account the investment objectives,
financial situation or needs of any particular investor.
These should be considered, with or without
professional advice when deciding if an investment is
appropriate.
Disclaimer
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Investment and Insurance Services
Our Business Model
Our Critical Success Drivers
The markets we operate in
Life insurance
Asset management
Platforms
Advice
Conclusion
Outline
4
Investment and Insurance Services
Our Business Model
Our Critical Success Drivers
The markets we operate in
Life insurance
Asset management
Platforms
Advice
Conclusion
Outline
5
Our business model involves competing across all
elements of the value chain
IIS products and services by value chain element
Aligned
External
IIS
CBA Group
Dealer group
services
•
Research•
Compliance
Technology
Adviser Support
• Sales
effectiveness
• Training and
development
Direct
External
• IFA’s
• Brokers/Agents
• SME/Corporates
• Platforms
• Institutionals
Bank Channels
Fu
nd
Ma
na
ge
rs / B
DM
s
DistributionAdministration
Platforms
Master Trust
•FirstChoice
Wrap• Avanteos
Property
Advice/Support Services
Managed
Funds
Life
Insurance
General
Insurance
Product
Manufacturing
• Practice
management
•
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Our Competitive Advantages
Distribution Mix
Scale
People
Brand
Value Chain
Participation across all elements of the value chain
Capture all margins
Flexible pricing
Multi-channel strategy
International distribution capabilities
Number 1 in Australian Retail Managed Funds
Number 1 in Life Insurance
Market leading platform inflows
Experienced management
Strong talent and leadership programs
Dedicated Centre for Adviser Development
Leading brands – Colonial First State, Commonwealth Bank
Award winning products
Award winning service
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Wealth Management Value Chain Margin Trends
DistributionAdministration
Platforms
Advice/Support Services
Product
Manufacturing
Revenue
Margins
Margin
Trends
60 bps 60 bps 20 bps 60 bps
Stable to Falling FallingStable to
Increasing
Stable to
Fee for Service
200 bps
Illustrative of Funds Management Industry
CustomerPays
Scale and presence across all elements of the
wealth management value chain means we are
less susceptible to pricing pressure in any one
element
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Investment and Insurance Services
Our Business Model
Our Critical Success Drivers
The markets we operate in
Life insurance
Asset management
Platforms
Advice
Conclusion
Outline
9
We expect continued strong growth in the life insurance
market
Observations
Return to rational pricing
Continued strong growth
Market still under-insured
Flight to security / safety
Fewer competitors
Disability income
Total risk
Lump sum
Group risk
Source: Plan for Life
Life Insurance In Force Premiums(December 1990 – December 2003)
0
500
1000
1500
2000
2500
3000
3500
4000
4500
De
c-9
0
De
c-9
1
De
c-9
2
De
c-9
3
De
c-9
4
De
c-9
5
De
c-9
6
De
c-9
7
De
c-9
8
De
c-9
9
De
c-0
0
De
c-0
1
De
c-0
2
De
c-0
3
Ris
k In
Fo
rce
Pre
miu
ms
($
M)
10
15.1%
20.9%
13.8%
11.1%
Total Life
Group Risk
Lump Sum
Disability
Income
We are the market leader in life insurance in Australia
Key Drivers of Success
Scale
Competitive, rational pricing
Product enhancements
Integrated technology solutions
Emphasis on service improvement
Continued growth from Bank channels
Holistic approach to lifestyle planning
Focus on customer and adviser
retention
Leverage CBA brand trust and security
Product Category Market ShareDecember 2003
Source: Plan for Life
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Investment and Insurance Services
Our Business Model
Our Critical Success Drivers
The markets we operate in
Life insurance
Asset management
Platforms
Advice
Conclusion
Outline
12
The Australian managed funds industry has a history of
strong growth
Observations
Australia is the 10th largest asset management marketplace globally
Strong growth in managed funds driven by:
Retirement policies
Growth in equity culture
Investor desire for more comfortable self-funded retirement
The retail market has good growth prospects due to:
Ageing population
Superannuation guarantee
Total Funds Management Market ($m)1991 to 2003 actuals, 2003 to 2013 forecasts
Source: Plan for Life, DEXX&R
Retail Wholesale
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
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91
19
93
19
95
19
97
19
99
20
01
20
03
20
05
20
07
20
09
20
11
20
13
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We perform well across our diversified product mix
Number 1 in Australian Retail Managed
Funds
Market leader in geared products
Award winning products
Leading masterfund
Breadth of products
Innovative alliances with boutique
players – PM Capital, 452
New product offerings – Global
Property Securities and Infrastructure
Income fund
Distribution breadth
Funds Under Management by Asset SectorMay 2004
100% = $101.5B
Source – Internal Analysis
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-1.0
-0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Dec-02 Mar-03 Jun-03 Sep-03 Dec-03
Net
fun
d f
low
s (
$ b
illio
n)
Retention is a key priority for retail funds
Drivers
Staff changes
Research ratings
Correction of overweighting in Aussie
Equities
Legacy business
Mitigation Strategies
Strategic alliances with boutique
players including PM Capital and 452
Investing in Group distribution
Investment in platforms
Retention strategies
Net Funds Flow
Market versus Commonwealth BankDecember 2002 – December 2003
Commonwealth Bank The Market
Source: Plan for Life
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Our brand and customer service ratings continue to be
strong
Leading brand
Recognised in the market for customer service
Winner – NSW Australian Teleservices Centre of the Year (2003)
1st Place – Best Communication and IT Services of any fund manager (2003 Assirt Service Level Awards)
1st Place – Best Communication of any Master Trust/ Wrap
Source: Newspoll data – November 2003
Newspoll Survey – Fund Manager Preference
November 2003
Who would you invest your money with?
10%
15%
20%
25%
30%
35%
40%
45%
50%
Dec-99 Jun-00 Dec-00 Jun-01 Dec-01 Jun-02 Dec-02 Jun-03
Colonial First State BT AMP AXA Merc/ING Perpetual
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Investment and Insurance Services
Our Business Model
Our Critical Success Drivers
The markets we operate in
Life insurance
Asset management
Platforms
Advice
Conclusion
Outline
17
Platforms capture the majority of retail funds
Observations
Platform success driven by:
Adviser productivity
improvements
Greater choice for investors
and advisers
More convenience
Creation of new margins
Consolidated reporting
Master funds / platforms
Total retail (excluding cash)
Retail Market Flows1998 to 2003 actuals, 2004 to 2006 forecasts
Source: Plan for Life, DEXX&R
0
50
100
150
200
250
300
350
400
450
1998 1999 2000 2001 2002 2003 2004 2005 2006
$b
illi
on
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We are well represented in the platform market
FirstChoice has been the fastest growing platform in
the market since its launch two years ago
Over $6 billion FUA (June 2004)
Competitive pricing
Award-winning service
Recent enhancements offering more functionality
and investment options
New wholesale offering
Strong growth in Avanteos business through
acquisition of new clients
Telstra Super Financial Planning
FSP Group
Symetry
Over $2 billion FUA (June 2004)
Improved adviser and dealer group functionality
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Investment and Insurance Services
Our Business Model
Our Critical Success Drivers
The markets we operate in
Life insurance
Asset management
Platforms
Advice
Conclusion
Outline
20
We are prepared for the challenges in financial planning
Market observations
Rapidly ageing population
Inadequate savings to support retirement
Inadequate protection of investor’s assets
Access to product choice for investors and advisers
Quality of advice
Increasingly sophisticated investors wanting more DIY products
Greater transparency of fees
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We will continue to invest in our advice channel
Our focus is on enhancing our quality of advice, improving
productivity and increasing total sales
Multi-channel strategy
Career development for advisers
All channels are important – minimise risk and maximise
outcome
Leverage and realise Commonwealth Bank assets
Large customer base and distribution network
Meeting more customers insurance and investment needs
Group Wide Advice Model
Advice model based on needs of customer segments
Affordable advice
Productivity improvements through use of technology and
process improvements
Centre for Adviser Development
Training, development and recruitment
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Investment and Insurance Services
Our Business Model
Our Critical Success Drivers
The markets we operate in
Life insurance
Asset management
Platforms
Advice
Conclusion
Outline
23
Conclusion
There is significant value in having an end to end value chain presence
We are building on our leading position in investments and insurance manufacturing
We are leading the market in our platform capabilities
We are further strengthening and broadening our significant distribution capabilities
We have a market leading position in the markets we operate in
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Commonwealth Bank
Investment and Insurance Services
23 June 2004
www.commbank.com.au