Wealth management still dragging on bank results
First half wealth management and insurance income for the major banks decreased by $3.1 billion compared to the same time last year, according to the latest data compiled by consulting firm, KPMG.
In an analysis which underlined the dilemma confronting the major banks and their ongoing investment in wealth management, the KPMG report said that while average funds under management (FUM) for the majors increased by $43 billion to $555.7 billion, reflecting positive investment market performance, declining funds under advice (FUA) margins, unfavourable Australian dollar movements, and reduced fee incomes were the main drivers for the softening of the majors’ wealth results.
The KPMG analysis has come at the same time as ANZ looks to dispose of some of its core wealth assets and in the wake of National Australia Bank’s transaction with Nippon Life.
The KPMG analysis noted that the Commonwealth Bank had reported decreases in both insurance and wealth related income streams, with insurance income decreasing by 19 per cent, to $393 million.
It said that, similarly, Westpac had reported lower funds management income largely driven by margin compression and higher insurance claims, including insurance claims from Cyclone Debbie.
Recommended for you
Unregistered managed investment scheme operator Chris Marco has been sentenced after being found guilty of 43 fraud charges, receiving the highest sentence imposed by an Australian court regarding an ASIC criminal investigation.
ASIC has cancelled the AFSL of Sydney-based Arrumar Private after it failed to comply with the conditions of its licence.
Two investment advisory research houses have announced a merger to form a combined entity under the name Delta Portfolios.
The top five licensees are demonstrating a “strong recovery” from losses in the first half of the year, and the gap is narrowing between their respective adviser numbers.
