Consumer trust isn’t something to be taken for granted, but reports from the UK, US and here at home are all pointing towards an uplift in trust levels around financial advice, which can only be a welcome development.
There are significant tailwinds behind the financial advice industry at the moment, but some major obstacles are still preventing advice practices from taking advantage of surging demand according to a new study from CFS.
Aussies leave NZ advice sector
There was a time, not so long ago, when AMP and the Australian banks dominated the New Zealand wealth management and advice sector. With Westpac confirming sale talks last week (October 16) and AMP’s ongoing sale saga, the locals have largely bought back the farm.
Forsyth Barr is set to leapfrog Craigs Investment Partners – two local players – as the largest authorised financial adviser (AFA) network in NZ, in a deal to purchase the retail wealth arm of Westpac. In a statement, a Westpac NZ spokesperson said the bank was consulting with 32 employees in its wealth team “about a proposal to sell part of our wealth advisery business to Forsyth Barr”.Â
No decisions had been made, the spokesperson said, and the bank was currently consulting with potentially affected employees. “We won’t be commenting further at this stage,” Westpac said.
Westpac NZ has about 50 AFAs under its wing, according to the bank’s website, but it is understood the group would retain a core of advisers to service wholesale clients. In August this year, Westpac NZ’s national manager wealth advisery head, Glen Macann, left after less than three months in the newly created role. Macann managed a team of about 20 senior advisers and reported to the bank’s head of private wealth, Katie Christoffersen.
The Westpac AFA numbers are down from more than 70 in 2017 while Forsyth Barr – in an acquisitive mood of late – accounts for more than 146 AFAs on the Financial Services Provider Register, compared with 112 three years ago.
Back then, AMP had the largest network of advisers in NZ but the big Australian company’s various woes, plus two failed attempts to sell the business – one in 2018 and then again last year, which was aborted this May – prompted an exodus of advisers and clients.
AMP no longer appears in the top advice groups list and, with the overall review of AMP’s total business, one suspects that its NZ wealth arm is unlikely to attract much interest again.
While the order will soon be reshuffled, the top three advice groups are currently Craigs, Forsyth Barr and Jarden (which recently expanded into Australia). Then comes the Australian bank ANZ, followed by NZ bank ASB and the remaining Australian banks Westpac and BNZ (owned by NAB).
With the Westpac advisers, Forsyth Barr would jump to almost 180 AFAs, well ahead of the 150-plus reported by Craigs. While Forsyth Barr would inherit the Westpac AFA clients, it’s not clear yet whether the proposed deal would also see an immediate change of underlying investments. Excluding KiwiSaver, Westpac has about $2.5 billion under management across its retail fund range.
David Chaplin, Investment News NZ, with Greg Bright, Inside Adviser
