Westpac unveils wealth business changes

Westpac’s wealth restructure will see top executives depart and about 900 jobs lost as planners move to a boutique firm.

Many Westpac financial planners will shift to Viridian. Pic: Hollie Adams

Westpac Bank has unveiled a sweeping restructure of its wealth business that will see two of its top executives part ways with the bank and many of its financial planners offloaded to boutique firm Viridian Advisory.

The changes are expected to mean the loss of about 900 full-time jobs at the bank, although Westpac says it will try to redeploy some of those roles.

The restructure will result in Westpac’s wealth division BT Financial Group being subsumed into the bank’s consumer and business bank, spurring the departure of BT boss Brad Cooper, according to an ASX statement.

Head of the consumer bank George Frazis has also flagged his departure from Westpac to pursue “other leadership opportunities”.

Under the changes, Westpac’s private wealth, platforms and investments and superannuation businesses will move into an expanded business division, while the insurance business will move into the consumer division.

The head of Westpac’s business bank, David Lindberg, will take over as head of the consumer division, while general manager commercial banking Alastair Welsh will lead the business unit on an acting basis. Westpac will conduct a global executive search for Mr Lindberg’s replacement.

The changes put the spotlight on potential successors to Westpac chief executive Brian Hartzer, with Mr Lindberg now likely to be seen as a good candidate alongside others including institutional boss Lyn Cobley.

As flagged by The Australian yesterday Westpac has also entered a deal to sell its financial planning arm.

Westpac’s exit will see Viridian offer employment to around 175 BT financial advice salaried advisers and other management and support staff, the statement said.

Westpac expects the changes will see job reductions of about 900 full time employees at the bank, depending on how many planners accept the offer to move to Viridian.

According to sources, partnership planners not moving to Viridian will be offered redundancy payments.

Mr Hartzer is said to have held a phone hook-up with his extended leadership team this morning to flesh out the details of the restructuring changes and planning divestment.

Viridian will also start supporting many ongoing advice customers who consent to transition from the anticipated completion date of June 30.

BT planning licensees currently operating under the Securitor and Magnitude dealer groups will be “assisted with different options, including self-licensing or moving to another licensee, which may include Viridian”.

Brad Cooper plans to seek a “new leadership role outside the group”. Pic: David Moir

Mr Hartzer said the overhaul of the wealth business was expected to be earnings-per-share positive in 2020 due to exiting a “high cost, loss-making business”.

“The decision to exit the provision of personal financial advice by financial advisers under

our licence has not been taken lightly, and our priority is to ensure the smoothest possible

transition for customers, advisers, and support staff,” Mr Hartzer said.

The one-off impacts from the transaction and implementation will be spread over financial years 2019 and 2020.

Westpac outlined initial estimates of one-off costs of $250 million to $300 million, and said proceeds from the sale will depend on the size of the business that transitions to Viridian.

The Australian first foreshadowed talks between Westpac and Viridian over the planning business a month ago.

Westpac shares were up 0.58 per cent to $26.68 in early trade.

Consumer bank boss George Frazis is leaving Westpac. Pic: Supplied

More to come