Westpac natural owner of BT: Pratt

The announcement yesterday that Westpac had finally got hitched with BT Funds Management marks the end of a lengthy courtship.

Westpac has been wanting to buy BT ever since it was put on the market by Deutsche Bank in 1999. Back then it was pipped at the altar by US-based Principal Group. However, the bank didn't just go away. From many reports it has made offers ever since then to buy the group.

Westpac's New Zealand and Pacific operations group executive Mike Pratt says that BT is "now in the hands of its more natural owner."

He says it is a better fit with Westpac than Principal as the bank has a large customer base (more than 6 million customer in Australia and 1.1 in New Zealand), and strong distribution channels.

One of the big pluses for Westpac in New Zealand is that it will get access to the growing independent financial adviser market.

One of the losers out of the deal will be ING. Currently WestpacTrust outsources investment management for the majority of its funds to the ING/ANZ joint venture and that arrangement has been recently renewed.

Pratt says that WestpacTrust will see the contract through to its conclusion in about 12 months time then the money will be managed by BT.

"We have no plans to discontinue that contract early," he says.

On the asset management side three changes are planned.

Pratt says the BT brand will be kept in New Zealand and current chief executive Craig Stobo will continue to run the business, reporting directly to Westpac group executive of wealth management David Clarke.

One of the big attractions of BT for Westpac was the BT Portfolio Services business in Australia that has more than A$6 billion in wrap accounts and master trusts.

In New Zealand WestpacTrust uses a wrap account which is provided by AMP Henderson, using the Ausmaq service which is ultimately owne by Bank of New Zealand's parent company National Australia Bank.