4 Comments 4 Commentsby Sally Lindsay
The country’s biggest adviser network NZFSG says banks are acutely aware of pain points for advisers.
As the boss of the aggregator company, chief executive Martin Baden says he works with the banks individually and through FANZ’s CEO advice forum, which brings all the aggregation groups together so there is a single voice to lobby industry stakeholders and regulators around pain points for advisers.
He was replying to comments from commercial finance brokerage Capital Connect senior manager and market commentator Ziggy Munz who says mortgage advisers should be putting pressure on their aggregators to be reminding banks there are five or six of them and the flow of origination can disappear if they don’t compete to better serve the third party distribution channel.
“There is power in numbers and advisers should be pressuring their aggregators to make a stand on banks’ turnaround times.”
Martin says over the past 12 months aggregators have expressed their concerns about banks’ turnaround times and the differences in customer outcomes between proprietary channels and the adviser channel. We believe that greater consistency and channel neutrality would benefit both customers and the broader industry.”
He says according to the banks they have been investing in putting more people into their assessment and loan maintenance teams.
“I understand that loan maintenance volumes significantly challenged banks following the February OCR drop. That has put a lot of pressure on loan maintenance teams as borrowers roll off higher fixed or short-term rates. That will come back to normal once banks get through that bubble.”
Advisers also been particularly concerned about the increasing mortgage assessment timeframes, which have extended to 10 days in some instances. “Banks are putting more staff on to process applications and answer adviser queries faster, but it takes time to resource them.”
The Finance and Mortgage Advisers Association of New Zealand (FAMNZ) has again slammed banks for slow approval times.
FAMNZ country manager Leigh Hodgetts says she has heard reports that real estate agents are telling buyers to deal with banks direct.
“This is unacceptable and anti-competitive and if the Commerce Commission is serious about competition, it needs to divert its focus away from advisers, who are doing all they can to ensure consumers are being looked after, to the banks who clearly see delays as a way to increase their profits.”
She says many of the association’s members are solo advisers and “this directly impacts their income and ability to write new loans”.
“Some are struggling emotionally as they see their income drop through no fault of their own.”
“Our members are spending 70% of their time on work that should be taking 20% of their time, chasing banks, getting errors fixed, and following up loan applications that have been in a queue for way too long.”
Feedback from members is the workload and delays advisers are experiencing is “next level” and, in fact, worse than before Christmas, Hodgetts says.
She is concerned the situation will worsen as housing market activity increases with dropping interest rates.
“We cannot accept more excuses from banks about staffing and lack of technology. Just fix the problem. Similar delays don’t happen in most other countries.”
Hodgetts has called on the Commerce Commission to put more pressure on banks to support mortgage advisers and their customers.
She recently met with new Commerce and Consumers Affairs Minister Scott Simpson over the Commerce Commission’s insistence mortgage advisers getting three completed offers for clients, but says FAMNZ’s efforts are being undermined by poor banking practices.
“Our members are spending 70% of their time on work that should be taking 20% of their time, chasing banks, getting errors fixed, and following up loan applications that have been in a queue for way too long.”
Martin says he remains committed to using established channels and maintaining an open, ongoing dialogue with the banks to drive positive outcomes.
“A positive sign is that the volume of business mortgage advisers are handling continues to grow. It’s now up to the banks to keep pace with this increasing demand.”
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In their simplest form they need to make their members as sticky as possible to extract revenue from them.
The Master FAP agreements groups have with lenders is their sole strong hold /monopoly over mortgage advisers.
Banks in lenders are happy to have minimal Master FAP licences as the cost to them is small but the FMA clearly didn't take this into account that there would be FAP’s under FAPs creating over regulation.
This creates duplications like regulation I.E advisers being forced to comply with master FAP Regulation requirements as well as their own FAP licences via the FMA so a complete double up, All at the so called group made up cost to the adviser.
Dealer groups /master FAP holders, also create behind the scenes referral structures based on bulk referrals by their members, where the groups receive back-office referral fees that are not disclosed to the advisers let alone the public.
Advocates for advisors I think not.