Previously, we have proposed a direct simulation scheme for colloidal dispersions in a Newtonian solvent [Phys.Rev.E 71,036707 (2005)]. An improved formulation called the ``Smoothed Profile (SP) method'' is presented here in which simultaneous time-marching is used for the host fluid and colloids. The SP method is a direct numerical simulation of particulate flows and provides a coupling scheme between the continuum fluid dynamics and rigid-body dynamics through utilization of a smoothed profile for the colloidal particles. Moreover, the improved formulation includes an extension to incorporate multi-component fluids, allowing systems such as charged colloids in electrolyte solutions to be studied. The dynamics of the colloidal dispersions are solved with the same computational cost as required for solving non-particulate flows. Numerical results which assess the hydrodynamic interactions of colloidal dispersions are presented to validate the SP method. The SP method is not restricted to particular constitutive models of the host fluids and can hence be applied to colloidal dispersions in complex fluids.