However, Richardson told Good Returns today that both the bank and BT Australia are "keen" to include the New Zealand funds management business in the listing.
"Unless something comes from completely left-field we will be included [in the float]," Richardson said.
It is understood Westpac will free float about 30% of the BT investment business with 10% allocated to staff and the remaining 60% to be held by the bank.
According to Richardson, Westpac decided to list the investment business chiefly to "retain good staff".
"This is not a sell-down to take advantage of good market prices," he said. "It's more about keeping good people - if the [investment] team goes they lose the business."
He said the new group would adopt a "boutique" funds management approach that should prove attractive to talented investment specialists.
Westpace said this morning that the proposal "recognises a fundamental structural transition taking place globally in funds management with customers increasingly differentiating the 'alpha' (above market) and 'beta' (at market) components of their portfolios.
"For 'high alpha' managers, where BT is focused, success is largely dependent on creating an attractive environment and the right conditions for the investment professionals responsible for delivering returns."
Currently, BT investment manages A$40 billion and NZ$2.5 billion. The investment arm only constitutes 10% of the total BT Financial Group with the proposed entity to exclude the BT wrap, insurance, multi-manager products, insurance and distribution arms.
BT Investment Management is expected to list on the ASX in mid-November with an institutional placement and a retail offering to existing Westpac ordinary shareholders. There will be no general public offer.
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