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Westpac dropping adviser wing to Forsyth Barr

Westpac in talks to sell its adviser wing to Forsyth Barr in a move that could signal the end of advice from the big Aussie banks

Thursday, October 22nd 2020, 6:55AM 7 Comments

The move has been confirmed by Westpac who said in a statement that “we are in consultation with 32 Westpac NZ employees in our wealth team about a proposal to sell part of our wealth advisory business to Forsyth Barr.”

Principal at Financial Focus, Murray Weatherston told Good Returns that “given what the banks have done in Australia, it’s been a pretty sure bet that the same thing was going to happen here in New Zealand.”

“The banks have never made a decent go out of wealth. In the capital constrained environment they work in, and especially with the reserve bank requiring them to hold more capital, being in advice was just an inefficient investment for a bank from a capital point of view.”

Weatherson holds that the banks approach to financial advice has been unsustainable for a long time, “My view has been for a long time that the banks are actually salespeople. I don’t know anybody who has walked into a Westpac branch and has come out with an ANZ mortgage. If you walk into a Westpac wanting KiwiSaver advice you will walk out with a Westpac KiwiSaver, same goes for life insurance. These banks have used their internal wealth arms to distribute their own products.”

“From a strategic sense with the utilisation of capital that doesn’t cut the mustard.”

Weatherston says that this move by Westpac could signal a broader change in the adviser wings of the larger banks. He says that we can expect to see some of the other big Australian banks making similar moves in a timeframe anywhere between “one day to a couple of years.”

Weatherston says this with a laugh, but it is a reasonably short timeframe, which, if it happens, will have huge implications for the New Zealand financial advice sector at large.

Tags: Foundation Life MyFiduciary wholesale

« [The Wrap] Divorce for AMP Wealth Management and AMP CapitalFMA: Dangers of economic uncertainty in a post-covid world »

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Comments from our readers

On 22 October 2020 at 11:43 am Richard Harden said:
Great picture, happiest I've seen Murray in years. Will be interesting to see what the other banks do. Can't see ANZ getting out of the Wealth space.
On 22 October 2020 at 11:55 am mockingbird said:
Truly Murray ... that picture! Ya won't look so happy on 3rd November when your hero is ousted!
On 22 October 2020 at 12:28 pm Mr UCITS said:
how do you cut mustard?
On 22 October 2020 at 1:49 pm Murray Weatherston said:
That's an old photo cos I've got new glasses now.
What odds will you give me on Trump to win - say $50 wager? You democrats are so cocky, might even be double figures I would have thought.
On 22 October 2020 at 11:22 pm Murray Weatherston said:
@Mr UCITS
To cut the mustard is “to reach or surpass the desired standard or performance”

Ye gods, my forecast already true! NBR story today has BNZ Life on the block (for sale)
On 23 October 2020 at 8:15 am JPHale said:
Signs of the times, nice call Murray. This and the BNZ comment only mean good things for the advice industry.

Advice is the critical piece, the product is important, but the matching of the product to the individual is far more important to get the desired outcomes.

Let’s see where Westpac Life goes, as independant distribution decoupled form providers is the only way you get away from square peg round hole VIO advice solutions.

It was fine back in the day of WOL and Endowment, 1 product multiple solutions. That’s not the world we live in now.
On 23 October 2020 at 11:15 am All hat no cattle said:
@Mr UCITS
it grows to about two feet high. A scythe works well. Or you could just use your cutting wit.

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AIA 4.55 2.25 2.59 2.89
ANZ 4.44 2.85 3.19 3.49
ANZ Special - 2.25 2.59 2.89
ASB Bank 4.45 2.25 2.59 2.89
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - ▼2.25 ▼2.55 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 ▼2.85 ▼3.15 3.39
BNZ - TotalMoney 4.55 - - -
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CFML Loans 4.95 - - -
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China Construction Bank Special - 2.65 2.65 2.80
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Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 2.50 1.99 2.35 2.45
Heretaunga Building Society 4.99 3.40 3.50 -
HSBC Premier 4.49 2.25 2.35 2.65
HSBC Premier LVR > 80% - - - -
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HSBC Special - 2.25 - -
ICBC 3.69 2.25 2.35 2.65
Kainga Ora 4.43 2.67 2.97 3.13
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.40 3.20 ▼3.40 ▲3.64
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.35 ▼2.55 ▲2.79
Liberty 5.69 - - -
Nelson Building Society 4.95 3.20 3.24 -
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Wairarapa Building Society 4.99 3.55 3.49 -
Westpac 4.59 ▼2.85 3.19 3.49
Westpac - Offset 4.59 - - -
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Westpac Special - ▼2.25 2.59 2.89
Median 4.55 2.71 2.99 2.89

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