Westpac in talks with Viridian over potential advisory sale

Westpac may be about to offload some of the more profitable parts of its adviser business to Viridian Picture: William West

Westpac Bank is understood to be in late stage talks with Melbourne-based Viridian Advisory over options for the bank’s financial planning group.

Sources told The Australian negotiations were advanced, but that a final decision for Viridian to acquire a large proportion of Westpac’s planners was yet to be made.

As it stands, the deal doesn’t include all of Westpac’s advisers, focusing instead on those that have bigger and more profitable client books.

Westpac’s financial results showed it had 803 salaried and aligned planners as at September 30, down 21 per cent from a year earlier.

“We believe in the important role of advice in supporting Australians to develop a financial plan for their future. But for some time, we have said we need to think about how we do that, given we are seeing a significant increase in the cost of providing advice and a complex regulatory environment, “ a Westpac spokesman said.

“As part of that process, we continue to explore options. Our goal remains to provide access to good financial planning advice. How we will do this into the future is something we continue to work through.”

A representative for Viridian declined to comment.

In November, Westpac chief executive Brian Hartzer confirmed a strategic review of the financial planning business had commenced and said that all options including a sale were on the table.

“As the regulations have gotten tighter and tighter, the cost of compliance has gone up dramatically, it has probably doubled, and the consequences of when we get something wrong are very severe,” Mr Hartzer said. “We have been trying to work through segment by segment, within the base, to understand what is the nature of the advice needs that those customer segments have and what are our options for providing that.”

Options included forging alliances with “third parties”, providing financial planning and advice through digital channels or continuing to have bank-owned planners, he added.

Viridian’s website says the company’s 40 or so representatives provide traditional investment advice, estate planning, insurance and lending, to a bespoke portfolio management service.

Interestingly, the boutique firm was set up by former Westpac financial planners almost four years ago.

Viridian’s top brass were said to be in Sydney last week meeting with senior executives from Westpac.