HBOS-owned BankWest has a policy of not giving financial advice to customers with less than $20,000 to invest or who do not make at least $1000 in revenue for an adviser.
The bank, which has aggressively marketed itself as a low-cost alternative to the major Australian banks, is chasing large profits through its insurance and investment subsidiary St Andrews Australia.
“We don’t want to see our advisers sitting with clients that don’t make them money. It’s as simple as that,” St Andrews head advisory manager Fabian Ross told the Retail Financial Services Forum in Sydney last week.
Clients without a minimum level of money are redirected to the bank’s over-the-counter or online products.
“We educate our advisers to push them through the direct channel,” Ross said.
Ross said banks need to rethink their wealth management strategies to halt declining profits and hang onto customers throughout their lifetime.
He said younger advisers need to learn selling techniques and too many advisers are failing to ask clients for referrals from family and friends.
“That’s the weak link in the value chain at the moment,” Ross said.
He said BankWest research found that price and service was the most critical factor in clients choosing to stay loyal to the bank’s wealth management services through to retirement.
He said St Andrews is now averaging 1200 referrals a month, 45 per cent of which go to a first appointment with an adviser.
It is also 60 per cent up on its sales budget compared to the same time last year.
Ross said selling more products per client was the key to achieving big profits.
“You can see why banks are getting into wealth management,” he said. “It’s extremely profitable.”
