The transition of clients from Commonwealth Custodial Services (CCS) to National Custodian Services (NCS) has begun, following the sale of CCS’s custody contracts to the National Australia Bank earlier this year.
With the deal done by way of novation, many of CCS’s clients — constituting up to $30 billion in assets under custody and administration — were faced with a decision to either transition to NCS or seek an alternative custodian.
According to CCS marketing director Rob Brown, while some clients are still undergoing investigations, the majority will move to NCS. “The bulk of our clients have accepted the offer to novate to NCS. To date around 60 per cent have done that,” he says.
Five clients with $6 billion in assets collectively have already been novated to NCS.
“We’re confident of a fairly high retention rate, and hope to have the transition completed before the end of the calendar year,” Brown says.
Of the CCS clients contacted by Super Review, Allianz Australia Staff Superannuation Fund, Australian Meat Industry Superannuation Trust, Brisbane City Council Superannuation Plan, Qantas Superannuation Plan, and Financial Synergy’s Super Synergy Fund and Grow Super said they were all moving to NCS.
The Coal Retirement Income Fund, Mineworkers Superannuation Plan, CSR Australia Superannuation Fund, and Australian Superannuation Savings Employment Trust (ASSET) were still in discussions about their future custody service provider, while Vision Super (formerly Local Authorities Superannuation Fund) was undergoing a tender process and the Labour Union Co-operative Retirement Fund was also looking at alternative options in the marketplace.
The Goodman Fielder Superannuation Fund will terminate its custodial arrangement, but fund secretary Peter Lambert stresses this has nothing to do with the CCS sale. “The fund size has reduced and the investments have been restructured to the point where there is little need to have a custodian involved.”
