[The Wrap] Are banks heading for the advice exit door?

As reported on Good Returns last week Westpac has confirmed that it has sold its advisory business to sharebroking firm Forsyth Barr. The move is no surprise as it appears all the banks are whittling back their financial adviser operations.

Information we have been collecting over time shows that many of the advisers who have been working for banks have moved onto other businesses.

Westpac's decision to exit had been signalled. Former Westpac chief executive Brian Hartzer told the royal commission in Australia that banks aren't interested in the additional risk of advice; nor the potential for brand damage. 

He said more compliance costs raises the costs of advice businesses and makes them more challenging. "The incremental focus on record keeping and compliance and so forth around financial planning, for example, was definitely challenging the economics of that business."