Westpac is thinking through the future of its financial advice service, according to the bank’s chief executive, Brian Hartzer.
However, he said the bank would not be walking away from advice and abandoning its advice customers.
Answering questions before the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, Hartzer acknowledged that the move by banks into wealth management could not be counted as a success.
He said the banks who had made the move into wealth management more than a year ago had clearly underestimated the amount of change that would be needed to make it a success.
Hartzer had earlier argued that institutions such as banks were better placed than many other entities to provide the resources to institute the controls necessary to run an effective wealth management business.
Hartzer also agreed with counsel assisting the commission, Michael Hodge QC that there was potential for conflicts of interest where wealth management products were manufactured alongside the provision of advice.
This was one of the reasons why Westpac had exited BT Investment Management.
Comments
I bet Westpac is thinking "please ban vertical integration Mr Commissioner".
I suspect they think Panorama would help them grab significant market share from AMP, IOOF, MLC & CFS if all platform providers had to compete on their merits rather than rely on tied distribution. Westpac would gain far more business from newly freed advisers from other institutions, than it would lose by no longer having their own tied distribution. And it gets rid of all the adviser compliance hassles!
If you have any doubt about this intent, take a look at "BT Open". It's a Panorama aligned package of services and discounts designed to make it easier and cheaper for advisers to become self licensed.
Interesting days ahead
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