Wealth Management

The National's Wealth Management division was formed following the completion of the National Group's acquisition of MLC in June 2000.

The division includes National Australia Financial Management, MLC and its subsidiaries, National Asset Management, National Australia Life, National Australia Trustees, BNZ Life Insurance and Independence One Life.

The division is a fully integrated wealth management business that offers investment, superannuation and insurance solutions to the retail and corporate markets, and business platforms to financial advisers.

Operating profit after tax and before abnormal items was $295 million, which represents 8.7 per cent of the National Group's total operating profit.

The division has a diverse range of operations in eight countries, including Australia, New Zealand, the United States, the United Kingdom and parts of Asia. Worldwide the wealth management division has more than two million customers and $61 billion in funds under management and administration.

The majority of these funds are held in Australia, where the division also has annual insurance premiums of more than $364 million.

The creation of the National's Wealth Management division provides the opportunity to realise the full potential of the National Group's international financial service operations by exporting certain capabilities developed in Australia to these international markets.

Numerous growth opportunities have been identified, including a substantial customer base in the United Kingdom, where the National has a strong presence. MLC's "manager of managers" investment approach may be readily exported to the United Kingdom and to Asian markets where we are rapidly growing.

In the Australian market the focus is to maximise the cross-selling opportunities arising as a result of the MLC acquisition through a range of distribution channels. This leverages the great strength of the National's customer base, product range and our multi-channel distribution strategy, which offers customers the broadest range of access points.

Choice and flexibility is the key in providing services to clients, whether it be through our adviser channels, direct and on-line through Your Prosperity, or via the corporate and workplace channels through MLC Implemented Consulting, Plum and AdvantEdge.

Business highlights include:

• Becoming Australia's largest integrated retail fund manager with $28.1 billion in retail funds under management, an estimated 14.5 per cent market share.
• Seeing our online business initiative, Your Prosperity being awarded "Best Broker for New Online Investors 2000" by yourbroker.com.au.
• Entering the life insurance market in Thailand with the launch of Advance MLC Assurance in Bangkok in August 2000. A joint venture with the Soon Hua Seng Group, this will offer tailored life insurance products to the premium market.
• Continuing the consolidated investment service offerings to ensure we provide choice and flexibility to meet the needs of our customers and advisers.

www.mlc.com.au
www.national.com.au
www.yourprosperity.com.au

Integration of MLC and the National Group businesses

The National is well advanced in realising the benefits of the acquisition of MLC with the integration of the National financial services businesses and MLC progressing rapidly.

The acquisition provides the National with the scale and expertise around which it plans to aggressively grow a successful wealth management business in Australia and overseas.

Only nine weeks after the acquisition was completed, the division's Board of Directors approved a master plan, including the vision for the business, organisational structure, operating models, product sets and employee care schemes, as well as budgets for the integration program for the new business.

The program is managed by a specialist team and has started to deliver a fully integrated business. The team aims to ensure that duplication of product and service offerings is reduced over the next 18 to 24 months and the synergy benefits realised.