Australia’s tight regulatory regime is stifling the nation’s private banking growth, according to bank chiefs.
Meanwhile, Singapore is emerging as another major global private bank hub, delegates at a Private Banking and Wealth Management Australia 2007 conference heard.
The sector was growing quickly in Singapore where $350 billion was held in 45 private banks – about 6 per cent of the market in Switzerland, Macquarie Private Bank head Guy Hedley said.
“I think it’s unrealistic to think Australia can compete as a global hub. I think a precondition for a hub in private banking is a partnership between the government and the industry. I think that’s lacking in Australia,” Hedley said.
Macquarie Private Bank had a close relationship with the Monetary Authority of Singapore, he said.
“They’ve made it known that they want to create a climate that encourages the private banking industry. I don’t see that being encouraged by the Australian authorities,” he said.
“It’s difficult for this industry to thrive and prosper in the absence of partnership with government.”
St George Private Bank general manager Andrew Black said the tax regime was a major clamp on the Australian private banking sector.
“A lot of the private banking services in this country are driven through tax effectiveness as opposed to wealth creation,” Black said.
Deutsche Bank managing director and head of private wealth management Michael Parsons said: “My colleagues in Singapore scratch their heads and say: ‘how can you operate a private banking business in Australia with such a tight regulatory and tax regime?’
“We’re all about transparency, but having to produce voluminous disclosure documents that confuse rather than assist the process.”
Westpac Private Bank general manager Jan Swinhoe said a surprising amount of Australians had money domiciled in Asia.
Private banks were working with the Government to examine greater Australian investment opportunities, Swinhoe said.
