Colonial First State's new customer chief outlines his brand transformation plan

Former Samsung Australia CMO switches categories and takes up the customer reins at wealth management group

Challenging the position of super funds on providing value and championing the power of choice are key prongs in the brand transformation strategy of Colonial First State’s new customer experience chief, Josh Grace.

This week, the wealth management business confirmed Grace officially as its group executive, customer office. The appointment comes after Grace spent several months working with former chief customer officer, Todd Stevenson, plus CFS chairman, Rob Coombe, in the business.

Grace was most recently the CMO of Samsung in Australia, a three-and-a-half-year tenure which led to recognition on the 2020 edition of the CMO50 list. Prior to this, Grace was marketing leader for health company, Abbott. He also spent several years agency-side, working for the likes of Leo Burnett and Young and Rubicam.

Grace told CMO the fact he was already seen to be having strong impact internally made him a no-brainer choice to replace Stevenson as chief customer officer. But while the job description might be similar, the real difference is what has happened to the business in the last couple of years, he said.

Up until 12 months ago, Colonial First State was wholly owned by the Commonwealth Bank. In December 2021, private equity giant, KRR, completed its purchase of a majority stake in CFS, giving the business the ability to operate as a distinct organisation.

“The beauty of this deal is it gives the business a huge amount of independence and autonomy to pursue a transformation journey. Our owners are investing heavily in transforming this business,” Grace said. In fact, KRR is planning to invest $430 million over the next four years, more than twice what was available under previous ownership.

As an outside category hire, Grace is very much bringing new thinking to the transformation table.

“That’s what my task is: Relook how customer office is managed, the customer experience we deliver, how we manage customers and how we deliver great marketing communications and digital experiences across all touchpoints of our network,” he explained. “The priority is thinking about how we can transform not just in the context of CFS as an investment company, but also the category. There’s a strong opportunity to take CX and disrupt how that’s done for Australians.

“Our mission at CFS is to give Australians financial freedom and to retire with dignity… Everything we do around CX is about how we empower Australians to achieve that outcome. Fundamentally, it means we need to give them great investment options delivered in the most cost-effective way. That’s the message we’ll be getting out there.”  

While financial services and consumer technology appear different on the surface, Grace has plenty of learnings from Samsung he sees as valuable to the current task.

“You can think categories are different, but a lot of the same underlying business problems exist - brand issues, B2B channels then selling to customers,” he commented. “When I look at that here versus Samsung, there are lots of similarities. The difference for me is this is a wholly owned Australian company.”

However, Grace also managed CFS for 10 years ago on the agency side earlier in his career. “So I came in with a huge amount of knowledge on products and how it operates, which makes difference,” he said. “I got up to spread very quickly in the business and this meant I could make a quick impact internally.”

Levers for transformation and differentiation

For Grace, Colonial First State is an incredibly untapped brand. “There is a huge amount of latent love among many Australians who grew their retirement savings in significant ways with us from the 1990s and early 2000s,” he continued.

Yet transform it must. “The world has moved on a lot. In tech alone, just think how far we have come. At some point, you have to stop and relook at whether underlying technologies and services are delivering what is expected as a customer experience in today’s modern environment. That’s what this transformation project is all about.”

In terms of CFS’s two main products, the emphasis is on making sure those are at the “absolute cutting-edge of technology”, Grace said. “By default, we are then able to deliver the service customers are accustomed to in any category,” he said.

The other big opportunity is challenging the industry super funds based on the hybrid, advice-based model and variety of choices CFS pride itself on delivering.

“Our differentiator is we don’t just offer one thing, we offer choice and we’re not a set and forget product,” Grace said. “We bring investment products internationally to Australians and distribute them to everyday Australians. And we deliver them at a very low fee. With choice comes all of these options.

“What we also still believe is advice is an incredibly important part of growing a person’s wealth. When we talk about CX and digitisation, there are lots of things you can do digitally. But when it comes to wealth and building savings, you often still want some human connection. We believe in a hybrid model, really helping advisers deliver advice at a far greater scale across the industry.”

With significant digital transformation comes a need to bring in fresh blood and revamp capabilities and CFS is going through that process internally now. Grace saw the process creating opportunity for existing staff to broaden and stretch their careers in new spaces too.

“We have historically been a very paper-based business, for example. The reality is a lot can be done digitally, so it’ll be about looking at how we take what we’re great at and converting it to digital,” he said

As to brand positioning, Grace said the first must is giving people a sense they can trust you. “Trust is table stakes and we’ll be working hard on that,” he said.

“It’s also this sense of performance and great value. Imminently, we’ll begin new activity emphasising the great performance we deliver through choice and the low fees. Our admin fees are almost the lowest in the market. That’s not understood because industry super has communicated that message so strongly for so long.”

Again, the differentiator is choice. “We have 140 different funds you can access. Some are more sophisticated than typically found in an industry superfund, and where you get far more sophisticated investment options, which would be what high net worth investors and institutional-level investors get. We’re democratising those,” Grace said.

To help drive reach, CFS has become a major partner with SBS on the FIFA World Cup 2022. This activity will also help the business build awareness with a younger generation of Australians.

“Many older Australians have huge regard for us still, and still call us ‘Colonial Mutual’… there is a long heritage there. But there’s a group of younger Australians who don’t know us and the value we bring,” Grace agreed. “We need to make them aware industry super is one approach, but there are many other ways to get great value when setting yourself up for your second half.”

CFS has also just launched a new B2B campaign, ‘Step Ahead’, centered around how it feels when an adviser is able to ‘get a step ahead and stay a step ahead’ thanks to the capabilities of the company’s FirstChoice investment platform.

Helping advisers express the benefits of FirstChoice, professional actors were brought in to use all their theatrical skill to bring to life the excitement, passion, and sense of empowerment an adviser feels when using the platform. Again it’s creative focused on showcasing the effectiveness and efficiency the CFS FirstChoice platform has with advisers. The digital campaign is now being served to advisers nationally via LinkedIn and digital financial publications. 

Over the next 12 months, a key milestone for Grace is to see Australians sit up and recognise a genuine alternative to industry super.

“The narrative has been driven for too long that [an industry super fund] is the only way you can get to the outcomes you need. We really believe in the power of choice. If we can get a large proportion of our customer base recognising choice as also a great option, that will drive our future growth,” he added.

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