Australia’s Westpac has entered a deal to sell its Advance Asset Management business to Mercer Australia.

Westpac has agreed to sell its Advance Asset Management business to Mercer Australia, as well as entering a heads of agreement to merge the BT Funds Management personal and corporate superannuation funds with Mercer Super Trust, the Australian bank said in a filing to the Australian stock exchange Thursday. Superannuation funds are part of Australia’s retirement savings programs. BT, which is wholly owned by Westpac, offers wealth management, superannuation and insurance products.

«Simplifying» Westpac

Jason Yetton, chief executive of Westpac’s specialist businesses, said: «This is a further step in the simplification of Westpac and supports the group’s focus on banking in Australia and New Zealand. It also provides significant benefits for BT Super members.» The deal is expected to lower BT Super members’ fees and improve performance, Westpac said.

Advance is a multi-manager investment business offering specialist fund management services, including some options available through BT Super’s personal and corporate superannuation funds, the filing said. Advance had A$43.7 billion (US$31 billion) in funds under management at end-March, the filing said. Westpac said the deal would result in a small loss from transaction costs, and a gain from the sale of Advance, for a net after-tax gain of A$225 million.

Merging Superannuation Funds

Under the deal, BT’s personal and corporate superannuation funds, which have funds under administration of A$37.8 billion (US$26.8 billion) at end-March, will merge with Mercer Super Trust, the filing said. The deal won’t include superannuation funds on Westpac’s BT Panorama and Asgard platforms, the filing said.

In 2020, Westpac said it would exit operations in Beijing, Shanghai, Hong Kong, Mumbai and Jakarta, with a focus shift to Australia and New Zealand. That move was in the wake of several scandals across Australia’s banking sector. Since 2017, Westpac has needed to pay remediation to customers for a variety of lapses, many highlighted by Australia’s Royal Commission investigation into the sector. Those lapses included charging fees to deceased customers, issuing and charging customers for duplicate insurance policies and failing to properly disclose fees.

Mercer, backed by Marsh McLennan, has more than A$500 billion in assets under management.