Westpac Bank announced yesterday it is in talks to combine its business with St George Bank and make what may be Australia’s third-biggest dealer group by adviser and practice numbers.
If both banks were to merge, they would together have 1124 financial planners with 648 practices, according to data from the latest IFA Dealer Group Survey.
That would make the merged entity sit below Professional Investment Services, Australia’s biggest dealer group with 1540 advisers, and AMP Financial Planning, the second-largest with 1295 advisers.
Retaining the wealth management brands of both Westpac and St George is a priority of the group’s discussions, a Westpac spokesperson told InvestorDaily.
Spokespeople for both Westpac and St George would not comment if there would be financial planner job cuts. They would also not speculate when asked if Asgard’s software and platform would be integrated with BT’s.
Both companies would have a wealth management platform with $108 billion in funds under advice (FUA), a Westpac statement to the Australian Securities Exchange said.
“It will be like Woolworths compared to a corner store,” Morningstar analyst Peter Warnes said.
Westpac is the owner of Magnitude Financial Planning and BT Financial Group, a provider of personal and business insurance products, superannuation funds and the owner of BT Wrap plus BT SuperWrap.
St George is the owner of Securitor, the country’s 11th-biggest dealer group by adviser numbers and Asgard Wealth Solutions, the owner of AdviserNETgain and eWrap.
Combining BT with Securitor and Asgard will create an entity with a bigger menu of products, boosted distribution channels and cost savings, Warnes said.
“It is a large volume over a fixed-cost base, [merging] brings the cost-to-income ratio down,” he said.
Rivals Commonwealth Bank of Australia and its Colonial First State subsidiary hold $196 billion in FUA while National Australia Bank-backed MLC has $106.5 billion FUA, according to both firms’ latest figures.
