Banks poised to expand wealth services
Westpac is planning to expand its wealth management business to capitalise on growing demand for financial advice as the population ages.
With more customers tipped to seek financial expertise as the baby boomers retire, the bank aims to increase the number of advisers on its books over the next five years.
There are about 1000 financial planners working for Westpac and its wealth management arm, BT.
However, executives are finalising plans to raise this number markedly, with a focus on providing "scaled" financial advice that is narrower in scope and hence lower in cost.
CommBank this month opened a new platform for retail investors. And NAB is revamping its branch network as more customers do transactional banking online, which allows the bank to focus on the more lucrative business of wealth management and cut operating costs.
NAB will gradually replace tellers with "smart" ATMs and phase out features such as security screens. New branches will have an open-plan layout and encourage customers to talk to NAB about more complex financial products. Westpac unveiled a similar plan in December.
"A lot of over-the-counter transaction are high in volume and they actually take high costs to serve as well," NAB's executive general manager of retail, Vicki Carter, said.
"In the future many of those transactions will be done at different places ['smart' ATMs and internet]."
Ms Carter said the new NAB business model was in response to this trend and allowed customers to conduct simple transactions on machines but "still give them access to people when they want to have deeper conversations".
With profits from lending tipped to come under pressure from slower credit growth, banks are focusing on wealth management for its potential to generate big profits. In a sign of the industry's growth trajectory, the value of superannuation is projected to balloon from $1.4 trillion at present to about $6 trillion by 2030.
Frequently Asked Questions about this Article…
Major banks are refocusing on higher‑margin areas like wealth management. Westpac is planning to expand its wealth business and increase its number of advisers, NAB is revamping branches and shifting routine transactions to smart ATMs and online channels, and CommBank has opened a new platform for retail investors.
Westpac aims to boost the number of financial planners over the next five years and offer more scaled financial advice — meaning narrower, lower‑cost advice options — which could make professional guidance more accessible for everyday investors as the population ages.
Scaled financial advice, as described by the banks, is advice that’s narrower in scope and delivered at scale. Because it targets specific needs rather than offering full comprehensive plans, it tends to cost less and can be offered to more customers.
NAB will gradually replace tellers with 'smart' ATMs, phase out some traditional branch features like security screens, and adopt open‑plan layouts. The idea is to let customers do simple transactional banking on machines or online while encouraging in‑branch conversations about more complex financial products.
Yes. The article notes CommBank opened a new platform for retail investors, giving customers another digital option to manage investments and access investment services.
Banks expect lending profits to come under pressure from slower credit growth, so they’re shifting toward wealth management, which is seen as a higher‑margin area with the potential to generate larger profits as demand for financial advice grows.
The value of superannuation is projected to grow from about $1.4 trillion now to roughly $6 trillion by 2030. For everyday investors, that expansion suggests growing demand for retirement and investment services and more focus from banks and advisers on superannuation products.
Westpac and its wealth arm BT currently have about 1,000 financial planners. Executives are finalising plans to raise that number markedly over the next five years to meet rising demand for advice.
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