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Investors spoilt for choice of platforms

The on-again, off-again review of the St George wealth management platform Asgard appears to be on again, with questions being asked about St George's owner, Westpac, running two full service platforms under the one roof.

The on-again, off-again review of the St George wealth management platform Asgard appears to be on again, with questions being asked about St George's owner, Westpac, running two full service platforms under the one roof.

Investment platforms have become a key battleground for wealth managers seeking market share, particularly among the unaligned advisers. Platforms are used by financial planners managing some $400 billion of pooled investments.

Some parts of the St George empire are understood to be directing wealth management flows towards Westpac's flagship BT Wrap platform, rather than Asgard. These decisions have been made high up in St George.

Westpac's half-year results show BT Wrap increasing its funds under administration 5 per cent to $50.8 billion while Asgard's funds fell 2 per cent to $31.8 billion. Westpac has previously committed to Asgard but platforms require substantial investment to remain competitive.

Even with some of the nation's biggest platforms under its brands, Westpac may soon feel vulnerable. AMP is expected to shift as much as $7 billion of white label funds sitting on Asgard onto its newly acquired AXA North platform, while there's another $3 billion sitting in BT Wrap.

And the Commonwealth Bank's move on planning house Count Financial could also see further funds move off BT Wrap. Elsewhere, DKN, subject to a takeover proposal from rival wealth manager IOOF, has about $6 billion on BT platforms.

COUNT PROBE ON

Elsewhere in funds management, the competition watchdog will this week kick off its market probe into CBA's proposed $373 million acquisition of Count Financial.

CBA is believed to have taken initial soundings from the Australian Competition and Consumer Commission before going live on its bid but rival banks, financial planners and wealth managers will have until September 26 to argue to the ACCC against the transaction.

Approval for the deal is no formality following last year's decision to block National Australia Bank's move on AXA Asia Pacific.

SPINNING GOLD

Spin-of-the-day award goes to gold producer Unity Mining. Its ASX release announced a "management update" before proceeding to reveal that its managing director and chief financial officer were heading off to greener pastures.

So in a sense, the company has no management on which to update. An insider acknowledged it was not convenient to announce the departures of managing director Rod Hanson and CFO Tim Churcher.

But there was nothing sinister in it, we were assured. Hanson recently turned 60, which is as good a reason as you can get to reset your life ambitions. And Churcher has snaffled a position with a yet-to-be named opposition gold company.

The pair have been synonymous with Unity for the past five years or so. Unity is better known as the former Bendigo Mining which Hanson and Churcher did manage to get back into production at the Kangaroo Flat goldmine for a time after its earlier failures.

The renaming tells you that Bendigo ... we mean Unity, has very much moved on from Victoria. Make it an offer for the Kangaroo Flat on the outskirts of Bendigo because nothing else is happening there.

Unity's main go now is its Henty mine in Tasmania, a 30 per cent share of an African gold-focused company listed on London's AIM market and, last but not least, some $48 million in cash.

DEFAULT LOOMS

In southern Europe, on the Aegean Sea, Greece's natural resources include bauxite, lignite (low quality coal), magnesite, marble and hydro power potential. Or so a marketing document for bonds issued by the Hellenic republic observes.

The market is convinced Greece will default. Greek five-year credit default swap spreads, which insure government bonds, last traded 3238 basis points, implying a 92 per cent chance of default.

Two-year bond yields yesterday moved to an eye-watering 57 per cent a year and 10-year yields to more than 20 per cent (reflecting an expected recovery rate over time).

To avoid a default, Greece needs to meet European Union/IMF fiscal backing to secure a bailout. The next ?8 billion ($10.4 billion) tranche is due soon amid suggestions the key parties to the bailout are in disagreement about numbers and that Greece's cost savings measures could fall short. The key issue is whether Europe can continue to muddle through its problems or if markets will force an outcome.

NAB'S UK BOOST

A copy of the final report of the British Independent Commission on Banking was being studied in NAB's Docklands headquarters yesterday. Among recommendations, which included ring-fencing investment banking operations from retail banking, was the call for a more competitive banking sector.

The key takeout for NAB is the ICB's recommendation that any sale of the Lloyds 632-strong retail branch network should result in the emergence of a strong new challenger.

This includes ensuring the entity which results from the divestiture "has a strong funding position and sufficient scale", the ICB report said. All this makes NAB's Clydesdale Bank franchise in Britain even more valuable to financial upstart NBNK. Clearly NBNK, which is in merger talks with NAB, needs the clout of the Australian bank to make its bid for the Lloyds assets.


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