National Australia Bank has laid off about 50 staff from its wealth management arm in the past few weeks, according to the Australian Financial Review.
The newspaper reported that NAB refused to confirm the number of redundancies or say which areas had shed staff, but the NAB Wealth arm takes in the MLC superannuation and financial planning businesses, the private bank, the JBWere stockbroking business and general and life insurance.
“In March, NAB announced a strategy update to the market detailing changes to its senior management team and the structure of the organisation. This was designed to better align the business to the changing external landscape, allowing it to focus on simplification and better servicing our customers. As a result, there has been some reduction in roles within the NAB Wealth division,” a spokeswoman told AFR.
The bank reported a $56m decrease in operating income in the March 2013 quarter. Higher insurance claims also forced a $61m decrease in its net operating income from March 2012.
Former JBWere CEO Paul Heath resigned in June, as reported by Wealth Professional, and the AFR says that about eight senior bankers and wealth management staff left the bank in April.
Dale Gillham, chief analyst at Wealth Within says the move is not surprising, and has heard "in the rumour mill" that more banks will follow suit.
“The news I’ve been hearing is a lot of the banks are going to start getting rid of planners. Whether that happens, I don’t really know…Do the banks really need to be in that space? They’re a product provider that sells right across the board. I understand they want to drive distribution into where their products are but I think they need to concentrate on making better products and lowering their fees.”
He says that banks have traditionally been focused on buying distribution for their products, but FoFA is making that harder and he thinks that this is a good sign.
“To me, I’ve been saying for 20 years, until financial planners aren’t linked to product providers, we don’t have an independent financial planner.”
NAB was unavailable for comment.