Andrew Hagger

National Australia Bank CEO Andrew Thorburn has announced Andrew Hagger, Group Executive NAB Wealth, has been appointed as Chairman of JBWere.

Mr Thorburn said: “I am delighted to appoint Andrew to this role.”

“His expertise and counsel, including his deep knowledge of this business and the wealth sector, will serve the Board well.”

Andrew Hagger said he felt privileged to step into the JBWere Chairman’s role.

“JBWere has been helping to grow and protect the wealth of Australia and New Zealand’s most successful and innovative families, companies and for-purpose organisations for 175 years.

“I am looking forward to working with the Board and the high-calibre management team, led by CEO Justin Greiner, to continue to advance JBWere’s preeminent position as an innovator in financial services.

“We know there is real desire for expert wealth management advice amongst high net worth clients, but this market is largely underserviced.

“Our new high net worth wealth business model is designed to meet that need and forge a new way forward for private wealth advice.”

JBWere is 100% owned by the NAB Group and has recently embarked on a new Australian strategy of non-exclusive research and distribution arrangements, announcing in January a new strategic alliance with investment bank UBS, and, in April, a new strategic research and distribution alliance with investment bank, Moelis Australia. These alliances help JBWere continue to provide market leading insights, advice and exclusive investment opportunities to their clients.

Earlier this month, NAB announced its new business model for the high net worth market encompassing both JBWere and NAB Private (formally NAB Private Wealth). Under this new model, NAB Private is to become a pure private banking proposition for high net worth clients, offering specialised services such as, structured finance.

NAB Private will also connect clients to JBWere, its specialist private wealth advisory business, when clients are seeking quality advice. More than 60 NAB Private employees are moving to, JBWere, which will provide specialised wealth creation and protection advice.

Mr Hagger replaces former NAB Group Executive, Finance and Strategy, Craig Drummond. Mr Hagger’s appointment is effective 21 April 2016.

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Andrew Hagger

• MLC research reveals a third of Aussie parents believe their children won’t be able to live the same lifestyle as them

• Almost 1 in 5 Aussies will be relying on family inheritance to pay off their mortgage or to ensure their future financial security

• Over a third of Aussies believe they’ll be relying on the Australian government during retirement

As the debate around tax reform and superannuation continues, new research from NAB-owned wealth management provider MLC reveals Aussie parents are increasingly worried about the financial futures of their children.

The second part of a three-part whitepaper, Australia Today, shows one third of parents are concerned their children won’t enjoy the same standard of living as them.

The research, which surveyed more than 2,000 Australians, shows the cost of living, and the impact it will have on future generations, is a major cause for concern for many Aussies. Almost 60 per cent agreed the next generation will never own their own home.

Andrew Hagger, NAB Wealth Group Executive and CEO at MLC, believes there’s a lot of work to be done to help the nation feel more confident about the future.

“We know that maintaining our lifestyle and financial security are our top priorities for Australians. However, Australians are telling us they are worried.

“There has always been the expectation that future generations will do better than us. Yet these findings paint a different picture. It’s concerning to see so many people worried about how their children will afford their own homes and live a comfortable lifestyle,” said Mr Hagger.

The research shows Australians are also concerned about their own financial futures – with over half fearing they won’t be able to maintain their current lifestyle in 10 years’ time. Concerns over employment are front of mind, with a third of respondents worried about job security.

Keeping the finances flowing in retirement is also creating a sense of unease. Two in five Australians don’t believe they’ll be able to fund their current lifestyle after retiring. A further one in five indicated they’ll rely on family inheritance to pay off their mortgage or ensure their financial security.

The survey also found over half of those currently retired (53 per cent) are relying on the government. But interestingly, fewer Australians (44 per cent) who are transitioning to retirement believe they will rely on the government in retirement.

‘‘This trend demonstrates the potential of our superannuation system – to increase self-sufficiency in retirement – and it seems this is being realised by individuals, which can only be a positive for Australia.

“That is why it is more critical than ever the objectives of super are enshrined in law as swiftly as possible to avoid constant political tinkering and provide stability and certainly to all Australians,’ Mr Hagger said.

The research also unveiled those who use financial advisers or planners (27 per cent) were significantly less likely to say they would rely on the government in retirement. ‘Seeking quality financial advice can make a real difference for Australians as they save for retirement and I hope this research will help more people to think about their financial future,’ Mr Hagger said.

Other key findings included:

• Over a third of Australians agreed they were concerned about their job security – with those who have moved to Australia in the past four years significantly more worried about their job security (78 per cent) compared to those who have been in Australia for longer (32 per cent amongst those who have lived in Australia for more than a decade)
• Close to three in five (56 per cent) were concerned about being able to maintain their lifestyle in 10 years’ time – with those approaching or in retirement more worried than others
• 43 per cent believe they wouldn’t be able to fund their lifestyle when they finish working and think they will have to rely on the Australian government in their retirement

“Australia has a world-leading retirement savings framework, however too many Australians are facing a retirement savings shortfall or are not fully involved participants in the system.

“With over a third of Aussies expecting to depend on the pension during their retirement – it’s clear that a lot more needs to be done to help consumers be more confident towards their future and their retirement”, said Mr Hagger.

About the Australia Today whitepaper

MLC commissioned IPSOS to prepare a three-part whitepaper to explore the challenge of how to get more Australians to think about their retirement. Over 2,000 Australians participated in the research, which aims to provide a fresh look at attitudes and perceptions towards their financial security and standard of living in the future, and how they expect to live in retirement.

Part 1 and 2 of the whitepaper is now available to download here , with Part 3 available in coming months.

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Andrew Hagger

NAB-owned wealth management provider, MLC is calling for a more informed debate on the future of our superannuation system, starting with a fresh look at how Australians are actually living their lives now, and how they expect to live in retirement.

Andrew Hagger, NAB Wealth Group Executive, and MLC CEO, today released the first of a three-part whitepaper commissioned by MLC to help better inform this debate. The research shows how Australians perceive their socio-economic standing and the lifestyle characteristics they value and aspire to in order to gain a sense of financial security.

The research reveals Australians are confused by their social standing, with 66 per cent of people labelling their class as either middle or lower middle, and almost onein-two Australians saying they are living ‘pay-cheque to pay-cheque’.

“At the end of the day, helping more Australians to save for their retirement should be a national priority,” Mr Hagger said.

“But, with almost one-in-two Australians saying they are living ‘pay-cheque to pay-cheque’, we’ve got to ask ourselves if we’ve got the settings right to achieve that aim.

“When more Australians fund their own retirement, we win on two fronts – we improve our quality of life, and reduce the budgetary burden of an ageing population for future generations.

“But, in order to have a well-informed national conversation about our super system, we need to understand how Australians identify themselves and discover their aspirations.

“We all have a stake in this goal and NAB and MLC, as one of Australia’s largest super and financial planning providers, is prepared to take a lead role in the debate and offer options to bring about enduring change.”

Stuck in the middle; an Australian class conundrum

The research, which involved surveying more than 2,000 Australians, reveals Australians have a striking perception problem when it comes to their personal socioeconomic standing and that of others.

The Australia Today whitepaper lifts the lid on how Australians are living their financial and social lives. The report shows that Australians are confused by their social standing, with 66 per cent of people labelling their class as either middle or lower middle, when in fact only 20 per cent of Australians actually fit into this category.

Socio-economic confusion

The report found that 40 per cent of Australians actually fit into either the upper class or upper middle class categories, when benchmarked against a range of factors including income, occupation, employment and home occupancy.

The research suggests the confusion lies in the perceived difference between ‘lifestyle’ and ‘standard of living’, with 75% of respondents agreeing that having a comfortable lifestyle means ‘having enough money to do what I want, when I want.’

Higher income earners with a household income of $200,000 or more per annum were more likely to underestimate their financial position, with 44 per cent rating themselves as middle class.

Half (46 per cent) of Australians say they are living ‘pay-cheque to pay-cheque’, including one in five of those with a household income of more than $200,000 annually.

Nearly half of those surveyed told us that living comfortably requires at least $150,000, and an overwhelming majority say that being worth $1,000,000 does not make you rich in Australia today.

When asked to describe the lifestyle of a typical middle class Australian, many said that the pre-requisites are having a professional job, owning a house and car and being able to send their children to private school. With the average household income of the middle class sitting at $77,676 per annum, the research suggests there
is a clear disconnect between the definition of ‘lifestyle’ and ‘standard of living.’

“It’s clear that Australians perceptions of what the “middle class” is has changed dramatically from 20 or 30 years ago,” Mr Hagger said.

“But, while we have changed our spending patterns, have we also changed our savings patterns? Is the current super system helping Australians achieve the standard of living they aspire to in retirement?

This research also tells us that many Australians are looking to Government for the answers, with nearly half of those surveyed believing the government should do more to help middle class families.

“Whether it be the Hawke/Keating super reforms of the 80s and 90s, or the 2006 Howard-era Future Fund, both sides of politics have made substantial contributions to help to ‘save retirement’.

“Yet we know people contribute less when government tinkers or even discusses tinkering with the system. Super is a long term product that needs stable policy.

“The stakes are high. When we get super right, it helps Australians in retirement and helps our economy. When we get it wrong, we risk our future prosperity. “We do believe a key priority should be to establish a clear objective for our super system – one that all future reforms can be focussed on supporting.

“Any reform must maximise the retirement outcomes of Australians in the future – across generations.”

Other key findings included:

• When asked to select what might contribute to social class now, money trumped everything else
• 76% of Australians said that their mortgage has a big impact on their lifestyle, while 83% agreed that the cost of living is much higher than it was a decade ago
• Much of what is considered ‘the norm’ today would have been considered ‘luxuries’ 20 years ago. At the top of the list of new lifestyle essentials includes international travel, private schooling, technology and eating out.
• 85% believe that people nowadays live beyond their means.
• 48% believe that the government should do more to help middle class families, while 69% believed that the high cost of living meant that middle class people were struggling to make ends meet.
• The research found that while Australians may have the wrong idea when it comes to the social class they belong to, the great Australian can-do spirit is alive and well – with 75% of Australians believing that hard work pays off.

About the Australia Today whitepaper: MLC commissioned IPSOS to prepare a three-part whitepaper to explore the challenge of how we get more Australians to think about their retirement. Part 1 of the whitepaper is now available to download here, with Part 2 and 3 available in coming months.

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Andrew Hagger

JBWere announced it has entered into a new strategic alliance with investment bank UBS, which will strengthen its wealth management capabilities and allow a broader offering to its private wealth clients.

JBWere is embarking on a new strategy of non-exclusive research and distribution arrangements. Today’s announcement with UBS is the first of these agreements.

The non-exclusive arrangement will allow JBWere’s Australian clients to access UBS’s pipeline of equity deals and IPOs as well as accessing domestic and international investment research, covering more than 3,000 stocks in Australia, New Zealand and internationally.

JBWere CEO Justin Greiner said: “The alliance with UBS is fantastic for our private wealth clients and will allow them to access a large and diverse range of world-class research and products.”

“For 175 years, JBWere has helped grow and protect the wealth of our private wealth clients and we have a responsibility to continue to access the best possible research and product offering in an evolving market. The alliance with UBS will allow us to further fulfil this responsibility”.

Anthony Sweetman, Head of Corporate Client Solutions, UBS Australasia said: “The alliance allows two of the oldest and most prestigious financial services firms in Australia to continue to help their respective clients achieve their goals. The strategic partnership both strengthens our distribution network for equity capital market transactions and offers JBWere access to our leading global investment research.”

National Australia Bank (NAB), the majority shareholder in JBWere, has also announced today that it will exercise its option to acquire the remaining 19.9% share in JBWere from Goldman Sachs, reinforcing NAB’s commitment to the private wealth manager and its clients.

“We are pleased to also announce that NAB has purchased the remaining share of JBWere from Goldman Sachs. JBWere plays an important role in our client offering, and this deal cements our commitment to our clients and business,” said NAB Wealth Group Executive Andrew Hagger.

JBWere New Zealand will not be impacted by this change and will continue to work on its own arrangement with Goldman Sachs.

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Andrew Hagger

NAB Wealth yesterday announced that it has started proactively writing to customers as part of its Customer Response Initiative.

NAB Wealth Group Executive, Andrew Hagger, said yesterday’s update confirms NAB’s August update that we would start writing to customers in October, where there may have been financial loss caused by inappropriate advice.

“We’re committed to helping restore customer trust and confidence in the financial planning industry. As part of this, we’re taking a detailed look at our advice business, acknowledging that we may have made mistakes. Where we identify these, we’ll try to make things right.

“In August, we said we would begin writing to customers starting in October who may have received inappropriate advice dating back to 2009. We have now started this process.

“It’s important for our customers that we undertake this review in a thorough manner – and we will. Where customers have suffered loss due to inappropriate advice, we will compensate them for that loss,” Mr Hagger said.

NAB will be writing to customers through a staged process as it continues its review of advice files. Each customer will have a dedicated associate who will be able to answer questions about the review process.
Further, Professor Dimity Kingsford Smith will continue her role as an independent Customer Advocate in the implementation of the initiative, to ensure that the interests of customers remain at the centre of the review.

Since February, NAB has made $1.7 million in payments to 87 customers after resolving their claims for compensation. NAB is also continuing to respond to new complaints within 45 days as it has committed to.

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Greg has been acting in this role since the beginning of the year.

NAB Wealth Group Executive and CEO of MLC Andrew Hagger said: “Greg joined MLC more than 30 years ago and is well respected both within NAB and across the advice industry.

“His extensive knowledge of our business and the industry means he is best placed to deliver for our customers and advisers.

“We are part of a constantly evolving industry. Advice needs are changing and we need to continue to strengthen our business to ensure more Australians are receiving the financial advice they need to protect and grow their wealth.”

Speaking on his appointment, Executive General Manager Wealth Advice Greg Miller said: “I am passionate about financial advice and helping customers secure their financial future through support, guidance and advice.

“I am excited to lead a strong business that is well placed to support the ongoing financial needs of Australians.”

Greg has previously held a number of leadership positions at NAB Wealth, including leading MLC’s self-employed licensees and more recently the formation of MLC Direct in 2011.

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Andrew Hagger

Nearly half of Australians are undecided on whether they will have to sell the family home to fund their retirement, the latest MLC Wealth Sentiment Survey has found.

The quarterly survey has found 11% of Australians already plan to sell the family home to fund their retirement, with a further 42% undecided on what they will do.

Australians also expect to cut spending on their children, home and entertainment in retirement and direct the savings into meeting healthcare and medical costs. 

In net balance terms, 23% of Australians expect to cut back spending on their children in retirement, while 30% expect to spend less on major household items, followed by home improvements.

By comparison, most respondents expect their health spending will rise and to a lesser extent, other essentials such as utility bills and insurance. 

Australians are also more willing to cut back on entertainment and dining out costs once retired, but less likely to reduce spending on travel, groceries and their superannuation and investments. 

While more than half of those surveyed believe they won’t have enough or far from enough to retire, the overall level of concern about financial sufficiency in retirement fell for the September quarter. This is despite little change in conservative investor behaviour.

Commenting on the findings, NAB Wealth Group Executive Andrew Hagger said: “Australians are looking to rely on the family home to help fund their retirement and cut back spending on their children and home to make their savings last.”

“With a trillion dollar retirement savings gap and ageing population, we want Australians to start planning and investing for their retirement now so they can achieve their goals in the future.

“While the level of concern about financial sufficiency in retirement fell this quarter, half of all Australians still aren’t confident they will have enough to fund their retirement and around one in six are not investing at all. 

“Women also continue to worry more than men about retirement, with one in three saying they will have far from enough to retire. This is particularly the case for women aged 30 to 49.

“This is why we have launched our Save Retirement campaign to encourage Australians to take control and action to secure their retirement. Getting sound advice and plans in place early can make all the difference down the track.”

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Andrew Hagger

MLC has launched the latest wave of its pioneering ‘Save Retirement’ campaign to drive a national conversation about how Australians can bridge the trillion dollar retirement savings gap and secure their future.

In recognition of the crucial role financial advisers’ play in building the wealth of Australians, MLC has developed a campaign targeted to advisers encouraging them to become retirement conservationists and help save their client’s retirement.

The adviser campaign is rolling out across national trade press, while a major national consumer advertising campaign will continue the call to save retirement across TV, print and digital channels.

Why we need to save retirement:

• One in two Australians are set to outlive their retirement savings by more than a decade;
• The average super balance for those aged 60-64 is $115,400, despite a retiree today requiring at least $430,000 for a comfortable retirement; and
• On average, 60% of our retirement income is generated after we retire.

NAB Wealth Group Executive Andrew Hagger said: “We’re committed to being the champions of retirement and partnering with Australians to secure their future.”

“Trusted and quality financial advice is critical to ensuring Australians live comfortably in retirement, and ensuring their savings grow with inflation, manage risk and remain tax efficient.

“We know people who receive formal financial advice save more than those who don’t, resulting in a $91,000 increase in their retirement savings at age 65 if they receive sound advice and plan early.

“Advisers are front and centre of the challenge to ensure Australians meet their financial goals and we’re proud of the role our advisers are playing in helping Australians to plan for and save their retirement.”

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The working group will address issues such as the quality of advice, product design and remuneration structures which were raised in ASIC’s Review of Retail Life Insurance and Advice report released on 9 October.

As independent chair, Mr Trowbridge will convene the working group and facilitate industry and policy solutions. The group will specifically address retail life insurance product structures, financial advice and distribution practices.

Brad Fox, CEO of the AFA said: “Mr Trowbridge brings extensive knowledge of Australia’s regulatory system to the Working Group. This will be pivotal in assisting the group to develop sustainable and workable solutions for stakeholders.”

Mr Trowbridge’s experience spans the private and public aspects of the financial system and ranges from competition in retail financial services, to capital structure issues, system stability and regulation. From 2006 to 2010 Mr Trowbridge was one of three Members of APRA’s executive where he was responsible for life and general insurance and executive remuneration. He was a pioneer of general insurance actuarial work in Australia and held senior management roles with QBE and Suncorp. In 1981 he started Trowbridge Consultingwhich became a leading actuarial firm in Australasia and which merged with Deloitte in 2000. Also, after merging with a US firm (Tillinghast) in 1984, he gained extensive experience in life insurance and, on deregulation of banking.

Mr Trowbridge said: “The ASIC report points to some important issues for consumers and the broader Australian community. These are complex and difficult issues for the life insurance and advice industries to solve.”

“I applaud the Association of Financial Advisers and the Financial Services Council in taking the initiative to set up a Working Group which will make a concerted effort to find durable solutions in consultation with all stakeholders.”

“I am delighted to contribute to this initiative through leadership of the Working Group,” he said.

The Working Group will include three representatives from the FSC and three from the AFA. The FSC’s representatives will be: John Brogden – FSC CEO; Andrew Hagger – group executive, NAB Wealth and CEO of MLC Limited; and Geoff Summerhayes – CEO of Suncorp Life.  AFA representatives will include: Brad Fox – AFA CEO; John de Zwart – CEO of Centrepoint Alliance and Jeff Thurecht – AFA NSW State Director.

A public report on the group’s initial findings will be released in mid-December and a final report in February 2015. The Working Group will consult with the regulators and Parliament on its recommendations.

John Brogden, CEO of the FSC said: “We take the findings in the ASIC report very seriously.”

“It is important that consumer trust and confidence in financial advice and products is restored to ensure Australians have sufficient life insurance cover.”

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Andrew Hagger

NAB Wealth will refund customers after it discovered during a review that some of its Navigator platform customers had incorrectly been compensated after an investment income error.

NAB Wealth discovered the original problem and compensated customers in December 2012. It self-reported the error to ASIC and has kept ASIC informed as it carried out an independent review of the investment income error by PricewaterhouseCoopers (PwC).

The review identified a small amount of additional compensation required. All affected customers are expected to be refunded this additional compensation as soon as possible.

As a result of the review, NAB Wealth is enhancing the operating effectiveness of the Navigator platform to prevent future errors in the allocation of investment income to customers.

Alongside the Navigator platform review, NAB Wealth is also taking the opportunity to review its breach detection, reporting and escalation processes and procedures.

The reviews do not in any way relate to the quality of NAB Wealth’s advice to its customers.

NAB Wealth Group Executive Andrew Hagger said the business would compensate customers where inadequacies in its investment income allocation processes and procedures had resulted in incorrect compensation.

“We will take every step to ensure that our customers are compensated and as soon as possible,” Mr Hagger said.

“We recognise our business needs to be transparent and accountable which is why we have proactively engaged ASIC on the issues we are addressing and why we are advising affected customers of any compensation.

“We have worked very closely and constructively with ASIC and have already implemented a range of measures to prevent future errors.

“These issues are largely around processes, systems and controls. We know there are improvements that need to be made and we have already started to make the necessary changes. We are working with PwC to provide an independent view on these changes to ensure best practice solutions are being implemented.

“Our focus is always on providing the best outcome for our customers and we will work proactively to improve our processes, systems and controls to do so,” he said.

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