BT to cut fees and profits

WESTPAC’S wholly owned superannuation business BT Financial Group will take a hit to its profits of up to $70 million as it looks to cut fees it charges for managing member retirement savings.

The move by Westpac to cut some of its super fees sparked a heavy sell-off in the shares of rival financial service giants AMP and IOOF.

It comes as the banking Royal Commission gears up to hold an explosive fortnight of hearings into the $2.6 trillion superannuation sector.

BT Financial said it would be introducing a new cut-price 0.15 per cent asset administration fee for customers invested through the BT Panorama Investments and BT Panorama Super, along with a flat account fee of $540 a year.

BT Financial recently caught the market off guard with a decision to scrap all “grandfathered” payments on its products, including notorious trailing commissions that most people thought had been dropped when the Future of Financial Advice reforms were introduced. That overhaul was expected to wipe $40 million a year off BT’s bottom line.

Westpac is the only major bank to remain committed to its wealth management businesses after ANZ, NAB and the Commonwealth Bank all made moves to exit the scandalprone super, financial planning and insurance sectors.

“We’ve come out with a simple transparent price for everybody,” said BT Financial chief Brad Cooper.