Falling income from BT Financial Group's advice business is countering the improved performance of its private wealth division, Westpac's interim financial results for 2016 reveal.
The company revealed that BTFG's funds management cast earnings fell by $15 million in the first half of 2016, with the decline predominantly attributed to the lower contribution of BT Investment Management (BTIM) following its partial sale in the second half of 2015.
While the group reported a decline in cash earnings for the first six months of 2016, average funds under management (FUM) increased by three per cent (excluding BTIM) and funds under advice (FUA) grew by five per cent.
"Offsetting these improvements was lower advice income, softer FUM/FUA margins, decline in asset market and foreign exchange movements, which contributed to lower returns from investments managed by Ascalon," the report said.
BTFG chief executive, Brad Cooper, said the result had been impacted by market volatility and increased regulatory change and compliance.
Cooper said that despite the challenging conditions, the group had invested heavily in developing new capabilities in its Panorama platform to assist advisers, while noting the group's insurance arm had paid out more than $275 million in life insurance claims to more than 3,000 clients.
"Life insurance remains a topic of interest and I am incredibly proud of our genuine ‘customer first' culture which has allowed us to stand out in the market," he said.
"We are the first retail insurer to extend life expectancy time provision for terminal illness conditions, from 12 months to 24 months."