The Commonwealth Bank of Australia (CBA) has reported an increase in funds under administration (FUA) for the March quarter.
The bank late last week said that its FUA during the three months grew 0.2 per cent to $199 billion, mainly due to strong investment markets.
Net flows for the quarter were negative $1.9 billion driven by outflows from wholesale short term cash mandates and internationally sourced funds.
The FirstChoice platform and Custom Solutions business, which includes the FirstWrap product, experienced positive net flows of $440 million and $317 million respectively for the quarter.
CBA also said funds under management fell 0.8 per cent to $152 billion because of outflows from cash products and a decline in the value of global equities.
Plan for Life Actuaries & Researchers actuary Simon Solomon said that the financial services industry was picking up reasonable inflows, but this had been offset by higher outflows.
“The reason for that is people are taking money out of equity-style funds and putting them into term deposits where they can get good returns,” he said.
“So it’s a question of retirees who are fed up with the performance of share markets.”
The latest research from Cantstar Cannex has showed investors’ preference to allocate their money to term deposits is still strong.
The research firm’s Deposit Account Star Ratings revealed that in the last 12 months individuals have locked away $2.3 billion in funds in term deposits covering a variety of maturity periods.
