In the past two years, banks have been on a shopping spree, buying up wealth management businesses.
The acquisition of Axa Australia by National Australia Bank (NAB) has edged much closer.
This week, NAB reached an agreement with Axa's French parent to take over the Australian and New Zealand businesses.
The Australian Competition and Consumer Commission still needs to approve the deal, while AMP, which has shown interest in buying Axa, is considering its options.
If approved, the combined businesses will look after $149 billion in funds under administration and management. NAB will also own the advice businesses ipac, Genesys, Axa Financial Planning and Charter Financial Planning.
The potential purchase has capped off another round of shopping from the banks.
Westpac already owns St George, while rumours continue about a potential takeover of IOOF by ANZ.
Wealth management remains the jewel in the crown for the banks.
NAB chief Cameron Clyne spoke of the Axa proposal as a way to provide "the opportunity to enhance the access to competitive wealth management products and services within Australia and New Zealand".
Lonsec's latest report on the multi-manager sector notes that the importance of scale in multi-manager investing and the need for tied distribution are the drivers behind these large-scale acquisitions.
While the big four continue to beef up their wealth management businesses, super will still remain a focus. And given the scale of these businesses, new products that are cheaper and commission free may be on the horizon.
NAB-owned MLC is in the processes of weeding out commissions from its adviser distribution base.
Westpac-owned BT Financial Group's new product, BT Lifetime Super, does not pay commissions to advisers. Some in the industry are even saying the product resembles an industry fund.
And Colonial First State is now implementing single-issue and phone-based advice resembling some of the call centres of industry funds.
Industry funds, of course, do not offer the wide-ranging wealth management products of the banks. Super is their business.
With an increasingly consolidated market, however, banks will be ensuring their extensive distribution channels are poised to win the hearts and minds of Australians, their wealth and their super dollars.
The two non-consecutive alphabetic letters encountered most often last week caused more controversy than the underlying policy they represented, Wouter Klijn writes.... read more »
Home delivered!
Daily news, weekday mornings
Get the day's news delivered direct to your inbox. Register here (it's free!) and choose 'yes' to receive the InvestorDaily newsletter.
