ANZ aims to gain market share from major investment banks like Morgan Stanley and UBS by targeting Australia’s wealthiest families through private banking.
The lender’s ANZ Private division is capitalising on what is expected to be one of the country’s largest intergenerational wealth transfers, and has lined up a slew of new products for its wealthiest clients, who are considering the futures of family businesses or simply want to diversify their investments beyond real estate and stocks.
ANZ Private’s general manager, James Dunlop, emphasized the need of being present during the changeover to reach the country’s wealthiest customers.
“It is a real strategy around the next generation.”
Mr Dunlop stated that the bank was attempting to create trust with the younger generation, “so they actually see us in a different light”.
Its first move is a deal with fixed-income investor Income Asset Management, which allows ANZ Private’s existing ultra-high net worth clients access to a bond portfolio managed by Lakshman Anantakrishnan, the firm’s chief investment officer.
To access the bond pool, Mr Anantakrishnan, a former portfolio manager at Credit Suisse’s private bank, requires a minimum investment of $50 million, which he expects would result in a higher return in an era of rising interest rates.
“Part of the reason we are doing direct, fixed-income portfolios is the market cycle position where we have got to a point where … it is good value on a relative basis for fixed-income versus equities,” he said in an interview with The Australian Financial Review.
While ANZ Private plans to expand its offerings, capturing a larger share of the wealth pie is a daunting task for Australia’s fourth-largest retail bank.
With approximately $10 billion in private banking assets, it lags well behind its Wall Street counterparts, who routinely handle $25 billion or more.
ANZ joins other global wealth managers, such as JPMorgan and HSBC, in expanding their presence in Australia to target family offices with assets over $20 million.
Its private arm focuses on individuals and families with more over $3 million in investable assets, and ANZ Private obtains client goods from third-party providers.
Following the devastating Hayne banking royal commission in 2017, which levied significant charges of criminal misconduct against the industry, Australia’s retail banks generally withdrew from industries such as financial advisory and wealth management.