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Australian banks' offloading of wealth businesses continues

BNZ parent NAB has agreed to sell its MLC Wealth business to IOOF for A$1.44 billion.

Tuesday, September 1st 2020, 4:59AM 8 Comments

Ross McEwan

Group chief executive Ross McEwan said it would allow NAB to prioritise investment and focus on executing its “refreshed strategy” of delivering simpler, more streamlined products and processes for customers and staff.

“NAB has taken a disciplined approach over the past two years to transform the business and prepare it for exit,” he said.

“Significant work has been done by MLC chief executive Geoff Lloyd and his executive team to modernise and strengthen the MLC business and remediate customers.

“We have explored a range of transaction options and are confident this sale provides the best outcome for NAB shareholders and for MLC stakeholders.

“We recognise the specialised nature of wealth management and the opportunity for the MLC business as part of IOOF.”

Consolidation had the potential to reduce costs, complexity and risk, he said.

NAB will retain legal ownership of MLC’s advice entities for the purpose of completing its remediation programme.

Aligned advisers will be offered the opportunity to transfer to IOOF licences.

Tags: BNZ IOOF MLC Wealth NAB

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Comments from our readers

On 1 September 2020 at 6:50 am Murray Weatherston said:
I wonder how many of my industry association leader peers remember when they were embarassed when I "counselled" MBIE at a private meeting not to write the new regulations in favour of the banks (part of my unsuccessful "Regulatory capture" charge) and when asked "why not?" I responded that "because the banks probably won't be in the business in a few years time."
On 1 September 2020 at 6:53 am Pragmatic said:
I remember Murray - as my contribution to the conversation was for MBIE to develop a strategic vision that accounted for the obvious trends in the industry. Banks signaled their departure from wealth management back in 2015
On 1 September 2020 at 10:09 am Fred Dodds said:
I can recall those discussions Murray and yes I was surprised and a tad concerned at the time as the IFA had some 100 plus members from the bank ranks. They even supported and promoted CFP amongst their advisers -oh how things have changed
Perhaps best summed up by “The best things in life aren’t planned – they just happen”
On 1 September 2020 at 1:03 pm smitty said:
Let me frame upfront that I am not a bank adviser, but AU wealth businesses are being sold, I haven't seen the NZ arms yet. We have seen their business models change, but they remain in the industry and given their size and distribution, remain a sizeable influence, whether good or bad.

@ fred - Can you clarify your comments please? I'm not sure if you were being negative about the 100+ members (from banks) in the IFA. Please clarify.
On 1 September 2020 at 9:25 pm Gordon Gecko said:
How long will it be before the banks in NZ finally realise they are not adding any value to their customers in the Private Wealth and investment space and sell their books to proper fund managers who actually create wealth and value?
On 2 September 2020 at 9:37 am Fred Dodds said:
Hi smitty - certainly not negative on bank advisers.the point I was making was about how the banks have moved over the years from supporting advisers into a professional body and attaining CFP.
WhenI left I can recall bank members were circa 50 and vast majority held CFP qual.
On 2 September 2020 at 6:02 pm Pragmatic said:
Hi Gordon Gecko. Whilst I agree that banks are retreating from wealth management, I disagree that they aren’t adding value. Aside from 2 banks in NZ (one delivering passive solutions to preserve their margins, & one channeling funds into aligned funds), the remainder appear to be providing a high quality service to clients
On 2 September 2020 at 9:19 pm Gordon Gecko said:
@Pragmatic - I'd be interested to see what bank KiwiSaver or Investment Fund solutions have outperformed the likes of Milford, Fisher, Juno, Generate or Simplicity over the past 1, 3 or 5 years.
In the investment arena the underperformance of the bank investment solutions means they are detracting value not adding it. Happy to be proven wrong if someone can show me the data

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AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.14 6.75 6.39
ANZ 8.64 7.74 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.14 6.79 6.65
ASB Bank 8.64 7.14 6.75 6.39
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BNZ - Classic - 7.14 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
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CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 6.79 - -
Co-operative Bank - Owner Occ 8.40 6.99 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.49 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
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Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.69 6.59
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Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 7.99 7.79 7.55
Kiwibank - Offset 8.50 - - -
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Resimac - LVR < 90% 9.84 9.09 8.59 8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
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SBS Bank Special - 7.14 6.69 5.99
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TSB Special 8.64 6.99 6.75 6.65
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Median 8.64 7.19 7.27 6.65

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