Westpac/BT: we’ve made some errors
With thebenefit of 20/20 hindsight, Westpac’s buyout of BT Funds Management would have been handled differently, according to Westpac’s group executive of wealth management David Clarke.
After a week during which BT Funds Management dropped fees on its flagship BT Australian Share Fund in an attempt to quell outflows from the group and announced the appointment of US-based Putnam Investments to manage its $5 billion international share portfolio, the team responsible for settling down the acquisition was looking to reassure financial planning groups.
Clarke and BT executive vice-present Rob Coombe toldMoney Managementthat the transition of BT into the Westpac fold was well under control and that the project team was within two weeks of delivering the final shape.
They also suggest the appointment of Putnam had provided “a lot of clarity” for analysts and investors on the direction in which the group was headed.
The bottom line message delivered by Clarke and Coombe was that most of the critical assessments which had resulted in BT’s Australian equities funds losing between $5 million and $8 million a day since the Westpac buy-out, had failed to fully appreciate the level of commitment and planning involved.
Clarke says such assessments had failed to recognise the depth of management talent which existed.
The assessments had also failed to recognise that while Westpac was fully committed to ensuring the success of the buyout, BT Funds Management and Sagitta Rothschild would remain discrete enterprises and be managed as such.
Clarke acknowledges that the majority of the problems and negativity which had been encountered since the buyout had been the result of uncertainty, particularly with respect to who would be managing the international share portfolio, the style of portfolios which would come out of the merged entity and the ongoing relationship with independent financial advisers.
When asked what he would change if Westpac were to undertake the exercise all over again, Clarke says that he would seek to communicate more clearly with financial planning groups.
“We had a week to 10 days immediately after the announcement when we could have been more clear with advisory groups and communicated more effectively,” Clarke says.
Recommended for you
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.
With many advisers preparing to retire or sell up, business advisory firm Business Health believes advisers need to take a proactive approach to informing their clients of succession plans.
Retirement commentators have flagged that almost a third of Australians over 50 are unprepared for the longevity of retirement and are falling behind APAC peers in their preparations and advice engagement.
As private markets continue to garner investor interest, Netwealth’s series of private market reports have revealed how much advisers and wealth managers are allocating, as well as a growing attraction to evergreen funds.
