How the Australian Royal Commission could affect NZ Mortgage Brokers

The New Zealand Finance industry has always benefited from the services of Mortgage Brokers which allow customers access to the full market spectrum of loans, reliable no incentive-based advice and a ‘customer first’ experience.

With so much speculation surrounding the recent Australian banking Royal Commission, I was invited to visit one of the big banks to discuss the market and the changes that are being recommended.

The summary of the conversations I had with various representatives was that it is business as usual. Although the after-effects of this Royal Commission are being somewhat felt here across the Tasman, the banks in New Zealand do see significant value in the broker industry which accounts for a generous share of their business.

For some providers, this is upwards of 40% of where their business comes from.

This bank in particular sought to assure me that customers will always need reliable financial services. Rates are only heating up with some competitors reducing their offering to 3.99% for 12 months.

It’s also important to stress that, while we are keeping in close contact with our Australian counterparts, the situation here in New Zealand is very different. Our regulators have not indicated a significant change to the mortgage sector, they are in fact very supportive of the financial advice industry and the value of quality financial advice.

MFAA CEO, Mike Felton said: “We believe significant policy changes must hold a competition, consumer choice and access to credit for marginalised groups as the highest priority, to protect outcomes for consumers.”

Until banks qualify all their staff to become Financial Advisors and certified to give tailored advice, and not just class advice, there will always be a need in the industry. Customers need, and want, to be guided on how to make good financial decisions, what structure they should have, how to pay off loans faster and what the benefits are in proceeding with their transactions.

Rightly so. Customers are increasingly time-poor and while they may be experts in their own fields of work, they can become confused and frustrated at the process of gaining a loan and structuring their finances without the help and navigation of a professional.

I pride myself on the ability to take away a lot of the burdens and pressures associated with purchasing a property. Through diligent managing of paperwork, I guide my clients through each stage and make them feel comfortable that they are in safe hands with what can often be a daunting experience.