However, Rich says there is "no cause for alarm" if the other remaining bidder, US-based Principal Financial Group wins.
While a BT/Westpac merger is not a done deal, Rich says there is enough evidence to show such an outcome will certainly lead to a downgrade.
IPAC Securities general manager David van Schaardenburg says it's no surprise BT staff don't want to come under the control of a bank.
"Given that BT's management has had considerable autonomy and top of the industry compensation packages it's no surprise that they do not wish this to be meddled with."
Rich says his comments relate solely to the Australian businesses of the two operations. WestpacTrust in New Zealand and BT Funds Management (NZ) are two completely different operations compared to Australia, as the former outsources most of its funds management business and the latter does not have the dominate market position, like its Australian counterpart.
Despite that many of the BT funds New Zealanders invest in are managed by BT in Australia.
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