Northland Mortgage veteran considers quitting over 'compliance nightmare'
A 44 year veteran of the lending business is considering putting away his shingle because the industry has taken the wrong direction.
Monday, April 4th 2022, 12:22PM 
5 Comments
by Eric Frykberg
Laurie Wills, of Awesome Mortgages in Kerikeri, says no departure is imminent and he will probably try to stay within the industry in some form or other.
But he is fed up with having to worry about the regulator more than the client.
And he fears any similar trend by other mortgage advisers will reduce choice for the public.
Wills entered the banking industry as a 15-year-old and became a manager after three years. He later gained an MBA with distinction and has spent 22 years as a mortgage adviser, half of them with Awesome Mortgages.
But now he is thinking of quitting.
“It's a great industry to be in, but everyone is just making it too damned tough,” he said.
“It's too damned tough when most of the stakeholders that need to be kept happy are based on compliance,” he said.
“It's not about customer outcomes, it's compliance. In my business, who should be king? It should be my customer, my clients. Anything and everything I do should be for their best interests.”
But Wills says that is no longer the case. His departure from the industry is not just around the corner but it is being considered.
“It's not a cop out, when you have been in the industry as long as I have you become incredibly nuggety, you become incredibly resilient, you become incredibly tough at what you do.
“I don't feel that I've had enough (of this business), I just feel we have got it wrong, and it's the poor old consumer, sadly, that is ultimately going to be impacted by it.”
When he finally does go, Wills will take some good memories with him.
“A number of my clients have said to me over the years, you know what, working with you, Laurie, has not been transactional, it has been transformational, it has transformed what we have been able to do.
“And that was done in an era when we did not have all of the compliance nightmares that we have now.”
Wills says there have always been some wrong people in the industry. An easy way to get rid of them would be for banks to not deal with mortgage advisers who were not the sort of person they themselves would hire for a job. That would have been far more efficient than designing complex compliance rules.
“The only thing that is going to happen now is that we are going to see good people like me leave the industry and we are going to see the poor old consumer with less choice.”
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Comments from our readers
As part of mortgage advisers “value add” to their clients and to provide them on going advice, Advisers normally contact their customers around the time that the clients fixed term loan rate is due to expiry, the adviser can with the customers permission receive and negotiate updated new interest rates current loan details including current repayments, loan amounts and current interest rates from the customers’ bank.
The adviser can then provide the clients independent advice having all information at hand so the customers can choose to make an informed decision around their mortgage lending going forward.
This is a very important decision being made which effects the customer’s future financial position.
Once the customers have discussed their options with their adviser the adviser can confirm a new loan structure, lock in a new interest up to 60 days out from the expiry date of the current fixed rate direct with the bank on behalf of the customer.
Normally any new interest rates provided are normally valid or held for a period (anywhere from 2 to 3 working days) as to give the customers time to make the important decisions and have the conversations.
Advisers do receive small commission payments from most banks for being part of this process which has been in place for a few decades now.
So, under the new FMA regulations where the focus is on consumers getting more access to independent financial advice this described process sounds pretty good for the consumer and gives them choice and adequate time to make a decision, and if customers re fix with the existing bank they are not looking to re finance or move to another bank. (Good client retention)
but ……
ASB was the first bank to change this process basically confirming that all new interest rates will be provided direct to the customers online, rates offer will be the best available to the customer so not negotiable and the new rates available will only be valid for one working day.
The feedback from a lot of ASB customers is that they feel stressed and pressured to lock in a new interest rate with no human advice around the rate /repayments being given and very little time to make an informed decision is causing anxiety and, in some cases, mistakes are being made where the wrong loan term has been locked in and now can’t be changed without potential breaks fees being charged.
https://tmmonline.nz/article/976504902/brokers-unhappy-with-asb-s-new-refix-process
ANZ have now also followed ASB and now only offer customers new interest rates directly online with no guarantee that the rates are valid for even one day.
ANZ have said the customers can talk to an adviser if they want to, but ANZ will no longer provide loan account details to the adviser, the customers will need to provide all their loan details to an adviser so they can get independent financial advice, have that discussion, make a decision and implement that decision back on their online backing themselves, all in less than one working day.
I understand that banks make commercial decisions to maximize net profits and having customers click online to re fix their mortgage is no doubt saving the banks money around staff wages (no more human contact) and adviser commissions.
The question must be asked, so with the FMA so focused on better outcomes for bank customers and wanting more consumers to get independent advice, how can these banks go in the complete opposite direction pressuring customers to click a rate online with no advice whatsoever, cutting the time frame available for customers to even talk to their mortgage advisers and to make informed decisions.
One bank commented and said “this is what customers want “they don t want any advice around their mortgage lending, but I disagree, and I think the FMA would also disagree.
There will be a small portion of customers that are happy to click online with no advice whatsoever, but the majority of mortgage borrowers absolutely do want to talk to some one and access advice and to not feel pressured into making a financial decision in an interest rate increasing marketplace.
These banks are trying to make this as difficult as possible, and I can’t see how this is in the best interests of their customers.
Been an adviser for 15 years.
Not 1, not one, complaint or issue ever. Happy clients.
Now half my time is focused on (needless) compliance.
Rotten apples will appear and be removed from the basket. That doesn't mean all good apples also bear the brunt.
Previously you would call a client and advise them to refix a few months prior to rate expiry if that was in their best interest.
Now we have to write pages, follow templates, and maintain conversation records. So time consuming.
yeah, you're right, haven't had any practical experience can be an expert. shouldn't i be an expert in farming? at least i've successfully grown some vegies in my garden.
regulate by all means, but if you can't distinguish between regulating and sales process, you're most definitely NO expert. just admit it and quit. advisers shouldn't be the ones quitting for better customer outcome.
Compliance focused instead of client focused is a conflict of the Code. And the conflict is exaggerated by the banks seemingly following the rules.
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But he is fed up with having to worry about the regulator more than the client.