Private banking report puts Sydney-based Westpac, CBA on top

Westpac and Commonwealth have come out well ahead of the private banking offerings of ANZ and NAB.

Head of private Banking for WESTPAC, Jane Watt pictured at her Sydney CBD office this afternoon. Pic - Sam Mooy

Westpac and Commonwealth — the two Sydney-based banks among the big four — have come out well ahead of the private banking offerings of Melbourne- based ANZ and NAB, a survey of high-net-worth investors by the CoreData group shows.

The survey was of more than 1000 investors who variously have more than $2 million in ­investable assets aside from their superannuation, earn $400,000 a year or have a combined bank debt and investments of more than $2m.

CoreData chief executive ­Andrew Inwood said that, overall, Westpac came out ahead with a score of 8.7 out of 10, in front of CBA with 8.5, compared with ANZ on 7.3 and NAB on 6.7. The big four bank average was 7.8 and the industry average, including the other private banking offerings, came out at 7.1.

“The big advantage for Westpac appears to be its dominance in the areas that matter most to consumers, starting with relationship management,’’ Mr Inwood said.

“Obviously, there is the issue of performance, and much of that came from a decision about three years ago to offer services des­igned to exploit global opportunities. As we all know now, 2014-15 in particular provided 30 per cent-plus returns from some offshore investments by the time the exchange rate advantage was included.’’

Westpac Private Bank specifically set up a model allowing ­investors to buy international stocks direct that produced results that may not be replicated any time soon, but which has placed clients well ahead of investors who didn’t have that exposure.

The one-off benefit to unhedged investors of owning major US stocks in the 2014-15 year, thanks to the drop in value of our currency, placed such investors at a huge performance advantage.

Jane Watts, head of private wealth at BT Financial Group (a wholly-owned subsidiary of Westpac) declined to discuss performance but said “we tailor our involvement with clients by offering advice and access to best-in-class investment opportunities, on their terms”.

BT Private Wealth is a division of BT Financial and manages the private banks at Westpac, St George and Bank of Melbourne.

Mr Inwood made it clear that HNWIs were still very much an untapped market in Australia. There were more than 266,000 Australians fitting the description, he said, although fewer than 35 per cent used a private banking service.

“That would suggest that, prima facie, there is a big opportunity out there for private bankers to grow their share of a market that is just asking to be given good ­advice and service,’’ he said.

Mr Inwood said that, while 266,000 was about 10 per cent of the population, “the best available data shows us this cohort controls more than $950 billion in assets”.

The entire superannuation pot in Australia is worth just over $2 trillion and self-managed super fund trustees have about $600bn or close to a third of the total in their funds.

Ms Watts warned that private banking was a challenging business and people in it had to be ­seasoned change agents.

“Private bankers need to meet and ideally exceed the increas­ingly exacting expectations of HNW individuals.”