Macquarie lays off advisers, merges private bank and wealth management arm

About a dozen Macquarie advisers are heading for the door as it flags a merger of its private bank and wealth divisions.

The Macquarie Group Ltd. logo is displayed on the facade of the Macquarie Group Building in Sydney. Picture: Bloomberg

Macquarie Group has confirmed it will merge its private bank and private wealth divisions as it sends about a dozen advisers packing amid an attempt to target the high-net-worth market in Australia.

Macquarie Group (MQG) is informing about a dozen private wealth staff their duties are no longer required at the bank as the group merges its private bank and wealth management division.

It is understood up to 10 advisers in the private wealth division have already been told they are leaving the group.

Volume based commissions appear to be the target amid the overhaul, with chief executive Nicholas Moore and deputy managing director Greg Ward said to be cracking down on “the grid”, a form of volume based commissions.

Macquarie the merger would impact “a number of advisers”, but it is understood most will be retained. The private wealth division employs about 300 advisers. Macquarie said it was striking up discussions with other companies to find the advisers employment.

The group’s private wealth division is contained within Macquarie’s banking and financial services division run by Mr Ward.

High net-worth clients are the exclusive focus of Macquarie’s private bank, and also comprise a substantial proportion of its private wealth business.

“We are striving to create a comprehensive and tailored wealth and banking offering for our clients that can take them from the wealth accumulation stage of their lives, through to retirement,” head of wealth management Bill Marynissen said in a short statement.

“Concentrating on one client segment enables us to better deliver on this commitment,” he said.

Australia ranks inside the top 10 countries globally for high net-worth individuals, with more than 1.2 million adults with wealth of $1.3 million or more. This segment of the population has grown by about 80,000 adults since 2011.

“Focusing on attracting high net-worth clients is a logical evolution of our private client business and we believe it is a space in which we can be a market leader,” Mr Marynissen said. “We have carefully assessed growth opportunities in the high net-worth segment against the strong fundamentals of our business. These include a deep understanding of the high net-worth segment, our wealth and banking expertise and suite of solutions, and the capacity to build on our existing digital capabilities.”

Macquarie private wealth was the subject of an enforceable undertaking from 2013 to 2015, after the corporate watchdog found some of the group’s advisers were not demonstrating a reasonable basis for advice sold to customers and for poor record keeping, including instances where there was insufficient evidence that customers were “sophisticated” investors, which allows planners a greater degree of freedom.