Chief executive of Westpac-owned BT Financial Group (BTFG), Rob Coombe, has denied claims of large internal price increases being applied to Australian and global equity management ahead of the BT Investment Management float.

A source close to BT said the prices paid by Jason Yetton’s ‘customer solutions’ division (which includes BT Wrap) to Dirk Morris’ investment team had increased significantly this year. The source claimed the transfer price for Australian equities doubled some months ago from about 20bps to 40bps, and that the price for international equities – the bulk of which is outsourced to AQR, as well as a State Street index fund – had more than doubled, to 80bps, within the last few weeks. Coombe refuted those numbers as “;wrong”;, adding that only “;fine tuning”; of internal pricing relationships had occurred. “;[Significantly raising transfer prices] would be a stupid thing to do, you’d just be putting earnings into one part of the business at the expense of another,”; he said. Westpac will remain owner of two-thirds of BT Investment Management after the float. A BT Financial Group spokesperson said: “;We are not willing to go into specific terms of the contracts however the pricing and terms reflect an arms length negotiation between the purchaser and vendor of services and are in line with market prices. The total cost is broadly equivalent to what was charged internally to the division historically.”;

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