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.
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Comments from our readers
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.
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)
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.
it grows to about two feet high. A scythe works well. Or you could just use your cutting wit.
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