BT Financial Group (BTFG) has reduced its managed fund recommended list from several hundred to about 110 funds.
The list, which BTFG calls its high service list, serves as the framework for the compilation of the approved product lists (APL) of the financial planning businesses within BTFG, including Westpac and St George Financial Planning, Securitor, Magnitude and Licensee Select.
The reduction comes after BTFG decided last year to move the compilation of the high service list in-house.
Previously, research house Standard & Poor's (S&P) was responsible for compiling the list.
"Advisers had access to funds that were rated three stars and above," BTFG senior research manager Piers Bolger said. "It was certainly a multitude of hundreds in terms of products that were available."
According to data from S&P, the research house rates 513 funds at three stars or more. This figure does not include variations of the same headline fund, such as hedged or unhedged versions of the same fund.
Including all fund variations, the research house rates almost 1500 products three stars or more.
The planning groups within BTFG do not have to adopt the full service list, but can create their own APLs with fewer products.
"Each of those businesses have their own managed fund APLs. In effect, they can take all of the high service list as their APL, or they can take a subset thereof. It depends on what each of the wealth management businesses wants to do," Bolgers said.
"It is a function of the businesses not wanting to have too many products, a desire for how the businesses want to articulate their value proposition into the marketplace and that might mean they have a certain approach to constructing their APLs.
"We work with them in the context of ensuring that they have appropriate breadth and depth and style diversity across each of the asset classes."
The reduction in the number of products will be felt most strongly at St George Financial Planning and Securitor, which previously used broad APLs.
But the shorter APLs will help financial planners gain better knowledge of the product spectrum they advise on, Bolger said.
"What we want to have are planners who are better educated and have a greater level of competency to focus on the needs of their clients," he said.
"We feel that if we've got an adequate representation of quality managers across a number of asset classes and we can provide in-depth information on those products, then over time their competency levels are going to go up."
The new APLs for financial planners in the bank channels will take effect as of 1 December this year.
