Australian Banks' Wealth Push Hasn't Aided Clients, CEO Says - Report

Tom Burroughes

27 November 2018

says banks’ pursuit of wealth management revenues in Australia hasn’t succeeded from a customer’s point of view, its chief executive has been quoted as saying.

The bank reportedly told a Royal Commission that is probing a mass of shortcomings and problems in Australian banking that it opposes many of the group’s recommendations, including banning mortgage broker commissions, the Guardian reported. Westpac also opposes making industry codes legally enforceable, the report said.

The lender has reportedly conceded that the decision by Australia’s major banks to move into wealth management had “clearly not” been a success from the consumer’s perspective.

Brian Hartzer, told the commission he was opposed to many of the recommendations in the royal commission’s interim report although he said the bank was not opposed to change. Hartzer said he was
opposed to: prohibitions on authorised representatives recommending a product manufactured or sold by the licensee, bans on volume-based commissions for financial advisers, bans on trail commissions for intermediaries, requiring annual opt-in notices for ongoing fee arrangements, imposing a structural separation between product manufacturers and advisers, and giving industry codes legal effect.

Last year the Australian government created the commission to explore problems in the country’s wealth and banking system, such as money laundering control lapses, over-charging, charging for non-existent services, and other problems. Banks including Commonwealth Bank of Australia, Australia and New Zealand Banking Group and Macquarie have been involved. AMP, the large investments business, has also come into the firing line. To view a summary of developments and the background, see here.