BT Financial Group chief executive Brad Cooper has laid out his intention to increase the group’s advice revenue, strengthen its asset management capability and roll out a new wealth administration platform in 2014.
In a market update presentation delivered yesterday, Mr Cooper stressed that wealth management remains a “key priority” for Westpac – with BT generating 10 per cent of the banking group’s cash earnings.
“The natural alignment between banking and growth and the positive macro forces underpinning the sector make it a logical investment priority for us,” he said, adding that wealth is one of the few economic sectors in which growth is “locked in” from the ageing population and the rising superannuation guarantee.
“Given these demographic and policy trends, we expect that super asset growth will comfortably outpace that of the real economy for the next decade,” Mr Cooper said.
“We remain very well positioned across the whole wealth management value chain,” he added.
Since June 2010, BT’s wealth penetration has risen by 300 basis points to 21.6 per cent of the market – with 18.7 per cent of Westpac banking customers holding an investment product with BT, according to Mr Cooper.
Revenue per averaged salaried planner increased from $334,000 in 2009 to $451,000 in 2013.
“Our solid growth in planners combined with the significant improvement in productivity has lifted returns in our advice business,” Mr Cooper said.
BT has “worked hard” to implement the FOFA reforms and is “well positioned” as a result, he said, stating that “this is particularly true in our scaled advice solution and with the mix of advice we’re able to offer.”
BT is also strongly positioned in the superannuation market, where it has 6.9 per cent of the APRA-regulated segment, he said.
The area “grabbing most attention” in the superannuation space at the moment, however, is SMSFs.
“Many players are seeking to tap this segment, but few have the scale to cost-effectively develop a comprehensive SMSF solution,” Mr Cooper said.
“Most investors setting up self-managed funds do so to take control of their investments and minimise costs. Our new investment platform is being developed and designed accordingly,” he continued. BT has spent the last two years developing a new investment administration platform “from the ground up”, he said.
“The new platform will more closely integrate banking and wealth. It will have as single sign-on, mobile access, and increased straight-through processing,” Mr Cooper said.
“It will open up the platform to a wider investor base, particularly SMSFs, and allow us to compete strongly with other market offerings.”
The new investment technology will also “radically simplify” BT’s existing “complex systems”, said Mr Cooper.
“The BT Wrap platform was built some 13 years ago, so moving to a modern technology architecture will reduce much of the duplication and complexity built up over those years,” he said.