The market players are of the view that Westpac Banking Corporation (ASX: WBC) has been an outlier. According to them, the other three banks have been investigated thoroughly and Westpac has managed to sail through largely unharmed. However, the chief executive officer or CEO of Westpac has been placed in the witness box, and the key personnel of Royal Banking Commission is of the view that the bank is a different type of outlier. The bank is an outlier which ignored the advice of the corporate regulator with respect to the responsible lending even when the other banks operating in the industry has changed their position. It is an outlier which has plans to stick to its wealth management business while the other banks are planning to dump theirs. The recent events and the misconduct of the banks have made the investors confused on whether they should trust the banks or not.
The key personnel of Royal Banking Commission seem like very much interested in knowing that why the bank is planning to retain the advice business and also how much is the bank wedded to the decision. The personnel initiated the discussion by questioning that what the bank knows about its exposure size to the industry-wide fee. The answer which he got was the bank is not entirely sure. Further, the discussions were also made regarding the financial advice profession. The discussion started that one issue with moving to the practice which focuses around Westpac asking the wealth customers every year that whether or not they are ready to pay the fees for the services which are ongoing is the cost with respect to the higher administrative burden.
The key personnel of Royal Banking Commission asked the CEO of Westpac that whether or not they regard financial advisers as a profession? The CEO replied that it should be regarded as the profession and he also stated that more reforms would also support to make that possible. The personnel stated that in the past no one has been shelling out the actual or true cost of the advice. In reply, the chief executive of the bank stated that the personnel could go with this conclusion, but he (CEO) has to think about that. However, the key personnel moved further. He made the CEO agree that the banks had been primarily unable to make the business of wealth management success and then further questioned that whether or not the high-quality financial advice would be affordable for the ordinary Australians. The chief executive emphasized the importance of robo-advice and stated that the robo-advice services have been improved.
Westpac Banking ended the session on the positive note on November 22, 2018. The stock ended the day at A$25.680 per share which implies the rise of A$0.090 per share or 0.352%. The bank has a market capitalization amounting to about $87.9 billion. The bank’s annual dividend yield stood at 7.35%, and the stock price of WBC has been trading towards the lower range.
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