TSB cuts broker accreditations
TSB Bank is set to slash broker accreditations at group and company level ahead of the new licensing regime.
Friday, February 26th 2021, 7:21AM 
7 Comments
According to several industry sources, including senior figures at two adviser groups, TSB has written to both group heads and individual businesses to notify them of the changes.
Groups and individuals have been told that TSB is taking the action due to the new licensing regime.
The lender is understood to want to reduce the number of brokers it works with, as it does not have the resources to cope with the regulatory oversight needed under the new regime.
TSB, led by chief executive Donna Cooper (pictured), is said to have a number of direct agreements with individual brokers, which have been under review.
Smaller groups and businesses are likely to bear the brunt of the changes, advisers said.
The changes are likely to cause turmoil for many advisers with TSB relationships.
One group executive told TMM Online that some advisers who had placed "tens of millions" with TSB had been told their relationships would end.
"It's a pretty significant move, it's going to cause fallout, when advisers find out through no fault of their own they are being cut.
"TSB has said the impending regulatory change is to blame, and they want to deal with the uncertainty."
Another senior adviser was more circumspect over the changes.
"I believe it's mainly to do with resources, and what they can reasonably turn around given the volumes. So they are working through who gives them business and who doesn't, and looking at where they get their volume from.
"It's no different to the way Kiwibank do it, to be honest. When you are a smaller player, you can only handle so much business, so you have to be effective, otherwise you just annoy everyone," the adviser said.
TSB's call to cut some broker relationships is the clearest sign yet that lenders are adjusting their business models to fit with the new licensing regime.
The new regulatory system kicks in from March 15, and will see advisers subject to greater oversight and compliance measures, with banks also at greater risk of regulatory enforcement.
TSB did not respond to multiple requests for comment.
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Comments from our readers
If TSB want to cancel adviser accreditations now due to some advisers giving them say 15 deals a month and only settling 1 deal I can understand this. If however TSB are cancelling accreditations due to advisers not sending them any business at all or perhaps only one or two deals a year they need have a good hard look at their current policy, pricing and service levels and understand that post 15th March it would be a brave lender to tell the Financial Markets Authority that due to its own un-competitiveness and lack of resourcing they are now shutting the door to us and our clients.
Lest we forget licensing of the financial services industry is supposed to benefit the consumer NOT a particular bank's own business model.
P.S. Love your last comment about staff coming from other banks bringing their poor management and attitudes with them. I think the very same thing has happened at ASB.
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