Commonwealth Bank Sells Ultra-High-Net-Worth Advice Business to LGT Crestone

Highlights:

• Strategic Sale: Commonwealth Bank of Australia (ASX: CBA) sells its Commonwealth Private division, managing $5 billion in assets, to LGT Crestone to focus more on core private banking services.
• Global Wealth Competition: The sale highlights the competitive push among global wealth managers, including UBS, HSBC, and Goldman Sachs, to capture Australia’s ultra-high-net-worth market.
• Client Continuity and Growth: LGT Crestone’s acquisition includes offers to CBA's advisors, ensuring continuity for around 500 clients, while enhancing its role in Australia's private wealth landscape.

Strategic Exit Amid Intensified Wealth Management Competition

Commonwealth Bank of Australia (ASX: CBA) has announced the sale of its Commonwealth Private business, which serves ultra-high-net-worth clients, to wealth management leader LGT Crestone. This strategic move, confirmed on Monday, transfers approximately $5 billion in funds under management to LGT, allowing CBA to refocus on its core private banking services. The sale, expected to close by mid-2025, marks a significant shift as global wealth management firms vie for market share in Australia.

Evolving Wealth Strategy

The sale reflects CBA’s response to the increasing complexities of ultra-high-net-worth financial advice. CBA’s executive, Angus Sullivan, emphasized the bank’s commitment to positioning Commonwealth Private as a premier banking solution for affluent clients in Australia. During the transition, CBA will continue to provide financial advice to its clients until the deal's completion, while LGT Crestone has extended job offers to all Commonwealth Private advisors and support staff, ensuring continuity for clients.

A Growing Private Wealth Market

The transaction arrives amid growing interest in Australia’s wealth management market, particularly from global firms. UBS, for instance, has resumed Australian operations after a decade, HSBC has relocated private bankers to the region, and Goldman Sachs has identified Australia’s wealthy as a major opportunity. With 500 clients transitioning to LGT Crestone, the acquisition solidifies LGT’s role in this competitive landscape.

LGT Crestone’s CEO, Michael Chisholm, highlighted the alignment between the two firms’ client-centered approach. He noted that the acquisition enables the company to enhance its personalized, high-standard wealth services. LGT chairman, Prince Max von Liechtenstein, also underscored their commitment to supporting Australia’s affluent clients with stable and secure financial partnerships.

At the time of writing, CBA shares were trading steadily at $149.34, reflecting the market’s measured reaction to this notable industry shift.

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