Ultimatum set for Whittaker Macnaught advisers
Financial planners working for Commonwealth Bank-owned advice business Whittaker Macnaught will have to open a practice under Financial Wisdom if they wish to keep servicing their clients after the bank closes the advice business on 30 June.
Queensland-based Whittaker Macnaught, which was acquired by CBA as part of BankWest in 2008, currently has 28 employed advisers who serve approximately 9600 clients and manage $1.1 billion in funds.
Commonwealth Bank announced yesterday the advice business would close its doors for good on 30 June — a decision flagged to the advisers last month and made after an extensive review of the group's operations.
"Whittaker Macnaught currently operates under its own Australian Financial Services Licence, which requires discrete management, governance and operational structures," said Pauline McFarlane, head of specialist licensees for CBA Wealth Management Advice.
"When this model was viewed in the context of all of CBA Wealth Management Advice Licensees, it was clear this was not the most commercially viable way to deliver quality advice to Whittaker Macnaught customers in the long term," she added.
Given the size of the business, it made better economic sense for customers to have their ongoing advice needs met through Financial Wisdom, CBA said in a statement.
The bank said it would help any Whittaker Macnaught adviser establish their own advice practice under CBA-owned dealer group Financial Wisdom. However, those planners who do not wish to open their own practice will receive a redundancy package and the client book will be transferred to an existing Financial Wisdom business.
"After 30 June 2013, all Whittaker Macnaught clients will be serviced either through their existing Whittaker Macnaught adviser authorised under the Financial Wisdom AFSL, or through an existing Financial Wisdom practice," MacFarlane said.
Final decisions on the establishment of new, and expansion of existing, Financial Wisdom practices will be made by late May, the bank said.
Recommended for you
ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test.
Quarterly Wealth Data analysis has uncovered positive improvements in financial adviser numbers compared with losses in the prior corresponding period.
Holding portfolios that are too complex or personalised can be a detractor for acquirers of financial advice firms as they require too much effort to maintain post-acquisition.
As the financial advice profession continues to wait on further DBFO legislation, industry commentators have encouraged advisers to act now in driving practice efficiency.
