St Andrew's Australia, part of HBOS Australia, today announced an Australian market first in the retail banking arena with the launch of a new investment product available on the internet, over the telephone and through BankWest branches.
Called Top 200, it tracks the performance of the top 200 Australian shares on the Australian Stock Exchange and offers customers the chance to invest direct, without using a broker or financial adviser.
St Andrew's CEO John Van Der Wielen said the initiative was further evidence of HBOS Australia's commitment to increase competition in the Australian banking and finance industry through low-cost, customer-focused products.
"Direct index funds have been available overseas for some time and it's time Australians had access to the same diversity of products and services," Mr Van Der Wielen said.
"Top 200 means that Australians can now diversify their investments through the share market without extensive time-consuming research and without the need for a broker or financial adviser. It is especially suited for customers who have funds to invest but are time poor, or who lack the knowledge to acquire direct shares in an individual company.
"This is a largely untapped market segment and complements the financial planning services and products that St Andrew's already offers."
"Customers can apply over the phone or on the internet and can invest as little as $2,500 with regular contributions of $100, or $5,000 in a lump sum.
"Top 200's annual management fee of 0.98 per cent compares with the average 2.5 per cent through a financial planner."
Mr Van Der Wielen said Top 200 was a significant milestone in HBOS Australia's growth strategy to become a force in the financial services.
"In the UK, revenue from insurance and investment products accounts for 20 per cent of the overall group revenue of our parent HBOS plc. It is our intention in Australia to simplify insurance and investments products and make them more accessible to Australian consumers," he said.
"In addition we are seeking ways to expand our wealth management operations.
"Earlier this year, we acquired RACV Financial Services and we are building our financial planning capability and expect to have 50 planners around Australia by March 2006."
Mr Van Der Wielen said that the Top 200 investment fund would initially target BankWest customers. In WA Top 200's launch will be supported by an advertising campaign to leverage BankWest's strong market presence, but in time Top 200 could be distributed through other channels.
"St Andrew's is essentially a white labeling business, and while it makes sense for us to leverage other entities within the group, there is no reason why we would not make this product available to other institutions, as we have already done with our distribution of life insurance products"
