Westpac Private Banking

Hi Folks,

Anyone here had experience with the private banking arm of Westpac (under the BT financial umbrella)?

My broker is recommending moving a few loans to them and they seem to look at serviceability a bit different from the retail banking arm.

Thoughts?

 

they might have some scope for 'sophisticated investors' who are I think qualified with investable assets of $1mil and or $250kpa. As far as I'm aware sophisticated investors can be sold different investment products, but lending rules are the same.

 

The BT products are considerably more expensive than the Westpac products. The only benifit I could see from it was the 'personal' service.

All banks have a 'private bank' arm. Dedicated to high net worth/high earning individuals.

CBA offer a pretty good service though can be expensive.
StGeorge isnt worth the time
Westpac seemed a bit expensive for no real benifit.

The others like Citigroup, HSBC, BOQ all have them.

Ultimately its the same/similar 'products' as retail banking - but with a 'personl lender'. They may extend some product offerings for so called 'sophisticated investors' but thats about it.

Blacky

 

Every lender has this sort of service. The problem is they like to tie up all of your financial matters under an overall umbrella. It's convenient, but it you do tend to give up a lot of flexibility. The product offerings are often more expensive than the retail offerings from the same lender.

Also Westpac is the last lender I'd want to give up my flexibility too. Of the Big 4 banks, they're probably the most restrictive from an investors perspective.

 

I didn't know that they employed law graduates.

 

Hi Blacky,

When you say they are more expensive... Are you referring to rates or more the entry/exit fees etc etc?

 

Hi Peter,

Thanks for the feedback.

When you say Westpac is the worst for investors from a flexibility perspective, what factors are you referring to?

I've had a few loans with them over the last couple of years and have never had any issues with getting equity out etc.

My broker did mention that they were getting smashed by APRA on the serviceability side of things at the momen though.

In your opinion, what factors make the other three big banks better for investors?

 

So how does this differ to (the bad) X-Coll? I understand that even though each loan may be "separate" the private bank system seems to be similar in the fact that the bank knows all your business. Isn't is always better to split your portfolio up over a number of banks?

 

Investment products, like managed funds efts share trading, stuff like that.

 

The terrible serviceability they've introduced in the last few months is a seriously big deal. This alone makes them a lousy lender for serious investors these days. They used to be quite good, today they're not.

Westpac also have consistently had the most expensive standard variable rate since the GFC. I wouldn't base a strategic decision on 0.1% though so it's not a big deal.

They've got a couple of policy quirks that make them unfavourable for large portfolios. A big one is that once your rental income exceeds your PAYG they ask for your tax returns for income verification. This leads to a whole lot of problems, including them double dipping on the 80% rental income rule (serious they apply it twice, effectively they only count 64% of your rental income).

The real problem with almost all private banking products however, is they want to apply financial planning principals and put it all under a single umbrella facility. Another term for it is cross colalteralisation. Every lender will do this given the opportunity.

 

Very interesting Peter.

I was quite surprised at how large the borrowing capacity variance was between the banks.

In my case, I think the biggest factor was the weighting the bank would give to company profits on top of personal wages.

Will double check that they aren't trying to cross the loans.

 

Hi Rolf,

Can I ask who would be your first two preferences in most circumstances?

 

Just got off the phone with my broker.

Apparently a big part of the 'private' banking avenue is direct/quicker access to the credit assessor.

I bought up the poor serviceability of Westpac lately and it looks like this differs depending on which 'arm' of the bank you're dealing with.

One of the things we're discussing at the moment is the possibility of getting LMI waived on the deal.

Have to say... don't know how you brokers do it.
So many different variables and the banks seem to be constantly moving the goal posts!

 

It would be very interesting to bring that to the attention of APRA and ASIC. It suggests that if you go through certain channels they through responsible lending and regulation out the window. Any wonder we continuously see various scandals of conduct the the banks financial planning arms? I think this morning it's CBAs turn again, but they've all been there (almost all the time).

Seriously though, even with some favourable assessment, the gap between what Westpac can service and some competitors is absolutely huge. If Westpac are able to match what can be done elsewhere, I imagine they're doing it on a whim and not an established set of policies.

 

I had a client who approached me for lending, who was already 'managed' by westpac private bank. While I could get a better rate elsewhere, he still wanted to stay for ease of use. When I had got the deal ready it got redirected to the banker for assessment. Turnaround time was roughly the same (like Rolf said cant do much better than same or next day).

Interestingly she still needed a group 2 document, the PAYG summary to approve the loan, even though the client had all of his salary and everything financial held with Westpac.

 

Westpac have finally change they way they service self employed...they have finally realised profit should be assessable income when the borrower and company directors / shareholders are the same people.

Still sucky servicing overall but things will change