Wealth a key growth area for BT Financial Group

Aligning its banking and wealth distribution channels is one of BT Financial Group’s key strategic growth priorities, according to its chief executive, Brad Cooper.

Cooper said BT Financial Group has had a focus on the platform space, which is what it is known for, however, he saw opportunities for growth across the value chain. He said BT operated right across the value chain, from advice, platforms, product and investment management. However, he said the growth trajectory for wealth management was particularly attractive.

Cooper said in 2010, BT's bank deposits sat at $3.1 trillion, super at $1.2 trillion and insurance at $0.3 trillion. However, he noted that in 2020 it was estimated that bank deposits would sit at $5.9 trillion, super at $3.1 trillion and insurance at $0.8 trillion. This reflected a compound annual growth rate of 6 to 7 per cent, 9 to 11 per cent and 8 to 9 per cent respectively.

“So there’s a much bigger growth trajectory in wealth than in normal banking,” Cooper noted. “It’s not to say that banking isn’t growing in terms of assets and liabilities, or lending and deposits, but it’s a lower growth rate and lower margin, which is why all the banks are becoming so interested in the wealth side.”

Cooper said with 1,600 branches that have 14,000 employees, and 5.2 million active customer relationships, where less than 20 per cent have a wealth product through BT, “It’s a great opportunity to leverage that to provide wealth products”.

Cooper said BT is also looking at opportunities in the retirement segment.

“And I don’t mean annuities and capital guarantees,” he said. “When we do our research we see that people don’t talk about retirement as a date, they just want to start to work less and sustain a lifestyle. So how do we think about total asset accumulation, whether it's superannuation, other investments or their family home, and how do you get that pool of assets and convert it into an income stream to sustain their lifestyle for 30 years after they work less?”

Cooper said being part of a bank, BT can leverage the banking system’s payment system.

“We have ATMs and Internet banking. How do we pool these assets in the most tax effective way and give people access to them through the banking system so their super doesn’t continue to be separate from the banking? There is a real opportunity there that goes way beyond capital guarantees and annuity products.”

Cooper noted that BT had already gone some way down the path with its BT Super for Life offering, but he said while technology is important, the greatest challenge is winning people over and getting their perceptions and attitudes in the right direction.

Aside from aligning its banking and wealth distribution and focusing on super, accumulation and transition to retirement, Cooper said other priorities going forward included a focus on high-net-worth customers, improving the customer experience, targeting insurance segments and the advice and platform services.