Private banking will not be a home for advisers who choose to leave the industry due to the incoming FASEA standards, according to one executive.
At a media briefing in Sydney yesterday, when asked if advisers who don't meet FASEA standards would have a place in private banking, NAB Private customer executive Jason Murray said that private banking would not be a backup career for advisers that leave the industry.
“We are not a cozy place for people that didn't cut it in advising, our standards are probably higher given this is a regulated bank,” he said.
Mr Murray was keen to stress that NAB Private does not provide any financial advice.
"If people come looking for advice we send them on to third parties. But if they want to and can manage it themselves then we will help them," he said.
Mr Murray said that the advisers that were in the industry to earn money were not the ones that belonged with NAB Private.
“The DNA of an adviser can be anywhere from one extreme to another. One being ‘advice is a really good business because if I can get good funds under management I can earn some pretty decent commission for me’. That sort of adviser has no place in private banking,” he said.
Mr Murray said that private bankers at NAB were not advisers and were not remunerated through commission, nor products or sales but rather customer service and satisfaction.
Advisers who put the customer first and are genuinely passionate would probably do well in private banking, said Mr Murray referring to the wider private banking industry.
“You're either a good adviser and you’re going to stay in advice. If they are leaving advice, why are they leaving advice? Possibly because they are a bad adviser and possibly not going to cut it in private banking either,” he said.
Mr Murray was keen to stress that NAB Private does not provide any financial advice and if people came looking for advice he said they sent them to a third party.
"If people come looking for advice we send them on to people like JB Weir. But if they want to and can manage it themselves then we will help them," he said.
Private banking is one of its fastest growing businesses for NAB as the country continues to see a rise in the number of high-net-worth individuals.
Mr Murray said that private banking was meeting the needs of that growing market.
“We are one of the fastest growing parts of the bank. Private banking is a key growth area for the bank, not surprisingly given the stats,” he said.
The statistics provided by NAB found that there were over 435,000 high-net-worth individuals in Australia who combined were responsible for $1,720 billion in investible assets.
A high-net-worth individual was defined as having over $1 million in investible assets. Of those individuals, only 7 per cent had a private banker.
Mr Murray said that Australia was one of the wealthiest countries in the world and the high-net-worth individuals only had room to grow.
“Per capita, Australia is one of the wealthiest countries in the world. We are going through the biggest inter-generational wealth transfer in this country’s history and the high-net-wealth segment of the economy is the fastest growing in the country,” he said.
Mr Murray said that banking, like a lot of industries, is undergoing a major transformation.
“There is a real shake up of the industry going on at the moment. I think we will enter an era, as exists in other countries around the world, of a much greater predominance of advice for high-net-wealth individuals and for those that want to do it [themselves], it will be a more structured portfolios of diversified assets,” he said.
Eliot Hastie is a journalist at Momentum Media, writing primarily for its wealth and financial services platforms.
Eliot joined the team in 2018 having previously written on Real Estate Business with Momentum Media as well.
Eliot graduated from the University of Westminster, UK with a Bachelor of Arts (Journalism).
You can email him on: [email protected]
APRA-regulated super funds could create better member outcomes by taking the sam...
Australian high-net-worth investors lost more money than their global counterpar...
The negative impact of COVID-related market volatility on clients’ super inves...