The boss of Westpac, one of Australia’s largest banks, has said that its decision to exit the advice market “has not been taken lightly” as the firm looks to restructure its wealth management division.
In an update posted on the London Stock Exchange’s news service, the bank confirms its decision to pull out of the advice market in the wake of Australia’s nationwide Royal Commission into misconduct in the sector, and says it plans to do so by September this year.
The bank says that the move “reflects the changing external environment, including a trend by financial advisers to operate independently, or in smaller advisory groups”.
It quotes statistics that the proportion of advisers not aligned to a major bank or insurer AMP has risen from 61 per cent to 77 per cent over the last four years.
Chief executive Brian Hartzer says: “The decision to exit the provision of personal financial advice by financial advisers under our licence has not been taken lightly, and our priority is to ensure the smoothest possible transition for customers, advisers, and support staff.”
However, the bank adds that is plans to extend its advice referral model over time, and will also continue to explore digital advice.
The referrals will include a deal with Victoria-based financial services company Veridian Advisory, where around 100 Westpac advice staff are set to end up transferring as part of the bank’s plans to exit advice.