Around half of the 1,046 financial planning practices which were operating under Westpac’s financial planning licenses between 2009 and 2015 are no longer doing so, according to evidence heard at the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.
Westpac chief executive, Brian Hartzer did not disagree with a suggestion by counsel assisting the commission, Michael Hodge QC, that Westpac had a total of 1,046 practices operating under its license during the period.
Hartzer also accepted that “about half of the practices that were operating under Westpac’s license have ceased to be authorised representatives of Westpac and are no longer with Westpac”.
The Westpac CEO said he was not aware of the precise numbers but knew it was a big number and then confirmed that Westpac was aware of suggestions of an “industry solution” to the fees for no service and client remediation challenge.
Hartzer said he was not certain that Westpac had been the first company to suggest an industry solution to the Australian Securities and Investments Commission (ASIC) but confirmed there had been industry discussion of the prospect.
He described the industry solution as being a common methodology for contacting customers across all bank business than authorised representatives and suggested that it might extend beyond bank-owned businesses to other licensees.
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Brian Hartzer is not and never has been in advice - he is a banker - why would anyone be interested in his ideas for a business he doesn't even understand. Ask him about credit cards and commercial property loans - at least he has some concept of how they work
yes but Hartzer is the first bank ceo to advocate for individual adviser licensing and the removal of vertical integration, I think he is on the right track. He also mentioned the regulations throttling profits of advice businesses, i.e. they have moved on, they are now just dealing with legacy issues.
I thought Westpac was the only one of the four wanting to retain a wealth management arm within its business.
It already separated itself years ago from BT by floating it separately. It still has internal planners but that is all now subject to review according to his testimony.
Not fully correct. They only spun off the asset management business "BT Investment Management" now called Pendal.
Brad Cooper (BT CEO) does not value advisers - he just sees them as a way of flogging his product. He says they are still into advice but he is making it that hard for his own advisers they are leaving - why wont he be honest rather than do it by stealth. He is also a banker and has no idea about advice and that was the problem. Interested in product only.
Yes, all the executives are still championing the value of advice, we can have vertical integration because we'll be better at compliance etc. etc. But this is only because they are not quite ready to move on - they want to hang onto it until they are ready and depending on how the RC finalises etc. Basically they are telling advisers what they think they want to hear, because they don't want to spook the horses too early.
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