Powered by MOMENTUM MEDIA
the adviser logo
Compliance

Royal commission impact hits New Zealand

by Tas Bindi6 minute read
New Zealand map pin

The effects of the Hayne royal commission have been flowing over to New Zealand, despite the systemic issues identified in the hearings relating to the Australian market, a Loan Market broker has said.

Speaking to The Adviser, Auckland-based Loan Market broker Bruce Patten said the after-effects of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry has crossed over the Tasman because some of the financial institutions under scrutiny – such as ANZ Bank, Westpac, and AMP – also operate in New Zealand.

To continue reading the rest of this article, create a free account
Already have an account? Sign in

When ANZ and Westpac make a credit policy or other change, the other two of the big four, ASB Bank and the Bank of New Zealand (BNZ), tend to follow suit, according to Mr Patten.

“It is quite interesting that they feel that New Zealand should have to alter something when: a) we have not had a royal commission; and b) our Reserve Bank in New Zealand has said [it doesn’t] actually see the same inherent issues,” he said.

Advertisement
Advertisement

The Loan Market added that “the paperwork as become ridiculous”.

“All of a sudden, you're filling out 16 different [forms for one client]... It should be all incorporated in a single document, but they just keep adding on and adding on,” Mr Patten said.

“I think for [mortgage] advisers, the biggest frustration is that there is no collaboration amongst the providers. [They’re not saying], ‘Let's have the same piece of paper because it's all [designed] to achieve the same thing’.”

The silver lining is that the financial services royal commission is also driving New Zealanders to the broker channel, with the broker market share believed to be back above 40 per cent.

“The broker market share has grown much like it has in Australia because clients are seeing all the negative stuff come out about the banks. They're tending to go more to advisers because they feel that they will be better looked after and get more choice,” the Loan Market NZ broker said.

Mr Patten expects the same to happen in Australia because it’s difficult for large organisations to implement and sustain changes.

“The biggest problem is big organisations like banks will really struggle to get their staff to understand [the changes that need to be made], whereas advisers have always been able to adapt to whatever market changes there are,” he said.

“The end result of new regulation or anything else is normally a growth of market share for advisers. It's been seen all over the world.”

As the financial services industry in Australia awaits the release of the royal commission’s final report and recommendations, Mr Patten just hopes that the changes that are suggested are well thought-out and do not negatively impact customers.

“Once you legislate something, it's very hard to change so [my view is] decision makers need to be really careful about what their final decisions are, regardless of which way they go, because they need to think about what it is actually going to do, not to the brokers, not to the banks...but to the clients,” he said.

“If it becomes so onerous that the client struggles to get money, the whole system breaks down.”

[Related: ]

Royal commission impact hits New Zealand
newzealand map ta
TheAdviser logo
newzealand map ta

Tas Bindi

Tas Bindi

AUTHOR

Tas Bindi is the features editor for The Adviser magazine. 

JOIN THE DISCUSSION

You need to be a member to post comments. Register for free today

MORE FROM THE ADVISER

mark lewis fast ta llosc4

In Memoriam: Mark Lewis, 1963–2022

Mark Lewis passed away on Saturday (13 August). Mr Lewis was a well-known identity in the third-party broker...

READ MORE
anthony waldron mortgage choice ta ithtxm

Broker expertise key for securing right loan: Mortgage Choice

The data, which is derived from a June survey of 1,002 broker customers and conducted by Honeycomb Strategy,...

READ MORE
Mark Bouris new ifa

Brokers need to focus on the ‘value-add’: Mark Bouris

With competition among brokers increasing as the number of brokers rises – coupled with the fact that fewer...

READ MORE
magazine
Read the latest issue of The Adviser magazine!
The Adviser is the number one magazine for Australia's finance and mortgage brokers. The publications delivers news, analysis, business intelligence, sales and marketing strategies, research and key target reports to an audience of professional mortgage and finance brokers
Read more