The bank didn’t really have an adviser channel prior to around 2009, but the market now contributes around $1.7 billion, or roughly one quarter of the group’s $7 billion in cash and term deposit (TD) products, ME Bank general manager for network sales and relationships Michael Donohue told InvestorDaily.
“It’s a meaningful component and an opportunity to grow in partnerships with different financial advisers and advice groups,” he said.
Mr Donohue said the bank had recently upgraded its treasury service with a new “premium” offering for advisers, increasing its ability to attract deposits from the adviser market.
"We’ve improved our offering in terms of our service provision to independent financial advisers and stockbrokers… we’ve seen a big step up in deposits from those sectors.”
Mr Donohue said the decline in interest rates capped the growth in the cash and fixed income components of individual portfolios due to a search for yield.
“From our perspective, we’re still a relatively small player in the market and the opportunity to expand is still significant” he said. “Even in an environment where cash and TDs represent a smaller proportion of clients’ portfolios, the capacity for ME Bank to continue to expand in this sector is still significant.”
The bank had earned “significant goodwill” by taking a different approach to managing its maturing term deposit profile, accommodating flexible maturity dates, he added.
“Large and sudden rate cuts on term deposits are unjustified and only done to benefit banks, giving them access to cheaper money from depositors who forget to check their rates at rollover,” Mr Donohue said.
