SYDNEY (Reuters) - Macquarie Group said it will merge its private bank and wealth business units to focus on wealthy clients, becoming the latest bank to reduce its exposure to Australia’s scandal-hit advice industry.
The move is part of a trend seen at other global investment banks which have withdrawn from advising less affluent clients and comes amid an inquiry into the country’s financial sector that has revealed widespread client abuses at top wealth manger AMP Ltd.
Australia’s largest investment bank said merging the units would affect “a number of advisers” but declined to comment on a report by the Australian Financial Review that 34 adviser jobs would be lost.
“Focusing on attracting high net-worth clients is a logical evolution of our private client business and we believe it is a space in which we can be a market leader,” Bill Marynissen, Macquarie’s head of wealth management said in an emailed statement.
Australia has more than 1.2 million adults with wealth of A$1.3 million or more, making it a top 10 country for the rich, the statement added.
In mid-2015, Macquarie had to refund millions of dollars to about 2,300 clients who were charged more fees than promised, but the Sydney-based bank has been largely unscathed by the Royal Commission - a powerful independent inquiry that has revealed widespread misconduct in Australia’s financial sector.
Macquarie’s statement said the move would not affect its retail banking businesses.
UBS and Goldman Sachs are among other investment banks which have exited the industry in Australia or reduced their coverage to only the high net-worth bracket in recent years, following increased regulation of the scandal-plagued industry.
Reporting by Paulina Duran; Editing by Edwina Gibbs