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Announced almost one year ago, the merger between Westpac’s (ASX: WBC) BT Financial Group and Mercer has been successfully completed, creating a fund with $63 billion in total assets under management.
At the same time, Westpac has offloaded a further $43.7 billion in funds after successfully selling Advance Asset Management to the professional services giant for an undisclosed sum.
The Mercer Super Trust is now one of the 15 largest funds in Australia, with roughly 850,000 members.
“The completion of the merger and sale has created benefits for BT Super members, new opportunities for our people with a global investment and retirement specialist, and redefined the landscape of superannuation in Australia,” Westpac specialist businesses chief executive Jason Yetton said.
“Since the formation of Specialist Businesses Division in May 2020, we have announced and completed nine business divestments and as a result, Westpac is now a much simpler, stronger bank.”
At the time the deal was announced, Westpac confirmed BT employees who supported the funds would be “offered employment by Mercer as part of the agreement.”
From this month, Mercer Super members will have an increased investment range, complimentary financial advice, aged care guidance via Care & Living services, with the majority of members also set to see a reduction in fees.
Marsh McLennan Pacific CEO and Mercer Pacific president David Bryant said the merger will transform the superannuation sector for the ultimate benefit of Australians.
“We promised members that we would deliver them a market-leading offering in terms of benefits, performance and pricing and, today, we’re delivering on that promise,” Bryant said.
“Leveraging our global scale and the insights of our team of approximately 2,000 investment professionals around the world, Mercer Super members will benefit from being part of one of the most competitive super funds in Australia, and this is only the beginning.
The merger comes a few weeks after the nation’s corporate watchdog banned Westpac from selling three funds under Advance Asset Management to retail investors after it was found the products had failed to provide enough information to satisfy target market determinations (TMDs) – a document designed to make sure financial products only target customers they are suitable for. The three funds subject to the stop orders together held a total of $4.2 billion.
The orders from ASIC stopped Advance from issuing interests in, giving a product disclosure statement for or providing general advice to retail clients recommending investment in the three funds for 21 days from 14 March.
Mercer is also in its own battle with the Australian Securities and Investments Commission (ASIC) in the Federal Court over allegations the firm made misleading statements about the sustainable nature and characteristics of some of its superannuation investment options.
The completed merger comes two decades after Westpac wholly acquired Sydney-based BT Financial Group for $900 million. At the time, the deal made WBC the fourth largest retail funds manager in Australia.
“Mercer Super has been helping Australians with their retirement for more than 25 years and is well placed to support BT Super members and participating employers,” BT Super trustee chair Gai McGrath said.
“This merger has created a larger superannuation fund with the potential to deliver improved performance, lower fees, and broader member services, while maintaining continuity of knowledge and service for BT Super members.”
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