Grosvenor takes aim at banks with new KiwiSaver product

[UPDATED] Grosvenor Financial Services, which plans to rebrand itself next month, has taken aim at the banks and is introducing a home loan product, initially targeted at KiwiSaver members.

Thursday, August 11th 2016, 6:00AM

Grosvenor founder and managing director Allan Yeo has had the banks in his sights for years, telling advisers they are the biggest enemy and threat to their businesses.

This is clearly evident in the KiwiSaver market where they have enticed members to transfer schemes on promises such as being able to see their savings balance on their bank statements.

Yeo says non-bank financial services firms are "picking on the scraps" and he said Grosvenor wasn't prepared to do that.

"There is no greater opportunity than to take on the banks."

The Wellington-headquartered company, which provides services and funds to financial advisers and is a default KiwiSaver provider is about to enter the home loan market.

It has partnered with non-bank lender RESIMAC to offer a home loan product which will be first offered to KiwiSaver members to buy their first homes.

Yeo says many of Grosvenor's KiwiSaver members are the children of existing customers. Under the product loans can be secured against investments they have with the company. Currently Grosvenor will lend up to 60c in the dollar if the money is in a balanced fund and that number will be higher for low risk funds and lower where investments are in more aggressively managed funds.

It is not possible to use KiwiSaver funds as security.

While Grosvenor is first targeting the KiwiSaver market it "will very quickly be rolled out to other clients."

Grosvenor will essentially become an aggregator to RESIMAC and will manage commission payments and other tasks.

Yeo says the product has been set up where Grosvenor won't make any money out of it in the first 12 months.

A new innovation for the mortgage adviser market in New Zealand is a variable commission structure. This remuneration structure is used in the life insurance market by providers such as Fidelity Life and Asteron.

After 16 years Grosvenor plans to rebrand itself on September 19 when it issues new fund documentation as part of its transition to the Financial Markets Conduct Act.

Gone will be the old British name which was meant to portray, safety, old money and security, (yet was unpronounceable to many). Its new brand name, unveiled at roadshows this week, is Booster.

Tags: Grosvenor Financial Services KiwiSaver RESIMAC