The multi-million dollar reasons Westpac exited wealth
The reasons for Westpac exiting its wealth management business were laid bare on the company’s balance sheet when it released its full-year results to the Australian Securities Exchange (ASX) on Monday.
The company’s detailed analysis of its operations painted a gloomy picture, even with respect to those elements of the wealth business Westpac retained – the insurance and platforms business.
The analysis showed that net wealth management and insurance income decreased by $994 million or 49% compared to 2018, impacted by additional provisions for notable items mostly related to financial planning of $531 million.
However, it said that excluding notable items, net wealth management and insurance income was down $463 million or 23% mainly due to:
- No contribution from Hastings, following exit of the business in full year 2018 (down $203 million);
- Insurance income decreased $116 million (general insurance down $69 million, life insurance down $39 million);
- Lower platforms and superannuation income (down $98 million) primarily driven by margin compression from full year impact of platform repricing, implementation of regulatory reforms (Protecting Your Super), product mix changes and outflows in legacy platforms; and
- Cessation of grandfathered commission payments (down $42 million).
The banking group said the lower platforms and superannuation income had been partly offset by an 89% increase in BT Panorama funds to $23 billion due to inflows and higher asset markets.
Recommended for you
While returns and fees are the top priority for older Australians when it comes to their superannuation, more than one in 10 are calling for access to tailored financial advice.
Determinations by the FSCP since the start of 2025 are almost double the number in the same period of 2024, with non-concessional contribution cap errors and incorrect advice among the issues.
Whether received via human or digital means, financial advice is reportedly leading to lower stress and more confidence, according to Vanguard.
The new financial year has got off to a strong start in adviser gains, helped by new entrants, after heavy losses sustained in June.
