Westpac’s conundrum – what to do about Panorama?

ANALYSIS

It has been on the sales block for more than two years but Westpac has yet to find a buyer for its BT Panorama platform.

The dilemma facing the Westpac board in terms of Panorama was underlined by the company’s half-year results released to the Australian Securities Exchange (ASX) which made clear that while it could in no way be counted as a liability the need for continuing investment in its capability means Panorama’s net contribution to the balance sheet is comparatively modest.

Panorama falls within Westpac’s Specialist Businesses portfolio which covers those it has not yet sold which, overall, recorded a 31% decrease in net profit to $126 million.

Westpac itemised its platforms business as having $130.8 billion in funds under administration up 3% on the second half of 2022 supported by higher equity markets, partly offset by net fund outflows.

Two key facts about Panorama are revealed on the Westpac balance sheet – the number of active advisers may have actually declined but the number of investors and funds under management on the platform are holding up.

Perhaps just as importantly, and reflecting the bank’s continuing investment in Panorama, managed accounts funds under management on the platform was up significantly.

The number of advisers using Panorama declined from the 6,142 peak reached in September, last year, to 6,028 in March this year. There were 6,059 advisers using Panorama in March last year.

The number of advisers using Panorama needs to be weighed against the declining number of advisers on the Financial Adviser Register (FAR) and the level of churn between licensees. As well, the major leap in advisers using Panorama occurred in the middle of 2021 as a result of the migration of BT Wrap.

The migration of BT Wrap to Panorama saw the number of advisers using the platform almost double to 6,034, while the number of investors on the platform more than doubled from 115,369 to 234,948.

Where the demand for continuing technology investment in Panorama is concerned, Westpac’s investor briefing referenced “continuous investment in digital capability, feature improvements and enhancements based on adviser and member feedback.

It said managed accounts continued to grow with funds under administration reaching $13.7 billion, up 21% compared to the prior period.