Pepper Money: Sponsored Content

Pepper Money,Backing Kiwi Advisers and Customers

To further protect Kiwi borrowers, the CCCFA is set to undergo a series of changes for mortgage lenders around loan suitability, staff due diligence and personal liability, and proper evidencing of customer finances.

Effective December 2021, it is anticipated that the new rules on borrower suitability and affordability will impact financial advisers and their clients directly with many lenders adopting stricter affordability criteria to prescribe to the regulatory regime.

What does this mean for Pepper Money?

The new CCCFA requirements put the responsibility on lenders to take a much broader view of the borrower.

As a non-bank lender, this holistic approach is our ‘bread and butter’ and what the new legislation requires - being responsible, determining affordability, and making sure that we are acting in the best interest of your customer – is something we’ve always done.

Pepper Money takes the time to look at each customer’s situation and base our decision on that customer's specific ability to afford a loan. We don't throw a blanket over those who don't fit a box and call them 'too risky'. And we don't automatically turn someone down based on their credit history. That said, if the loan isn't right for them, we say so. We're here to help, not make things harder.

We aim to connect with the customer’s goals, acknowledge that they are not defined by their situation, and find a winwin outcome. And despite the individual assessment process, we maintain a oneday turnaround for home loan enquiries.

We are committed to maintaining this customer-centric approach to the distribution and monitoring of Pepper Money loans, and we will make sure that no matter the customer’s circumstances - we look at them now and into the future and do what is right for them.

How are you supporting financial advisers and their customers through change?

Pepper Money is committed to creating platforms that are designed with financial advisers and their customer’s needs in mind. We want to create an experience that is as effortless and frictionless as possible.

By maintaining an innovative mindset and our continued investment in technology, we can help support advisers in a time of uncertainty. Likewise, we are determined to minimise the administrative work involved in complying with CCCFA changes, so that financial advisers can focus on what they do best: finding financial solutions for families. And in the case of Pepper Money’s alternative lending products, offering mortgages to Kiwis who don’t fit the criteria of the main lenders.

Additionally, with the changing lending landscape and economic impacts of the global pandemic, chances are many customers that have never needed to consider an alternative lender in the past are now finding themselves needing a specialist solution. This unknown territory combined with increased turnaround times and paperwork from some lenders, can increase a customer’s unease when applying for a home loan. At Pepper Money, we believe that customers should never be in a position where they do not understand their financing options, regardless of their circumstances. That is why Pepper Money’s Product Selector was created - to help financial advisers source the bestfit home loan solution for their customer, the first time.

With the client’s written consent, the adviser can use the Pepper Product Selector tool to quickly and easily understand if one of our solutions is a good fit for their client. It follows our Credit Cascading Model, which provides three Pepper Money solutions (Prime, Near Prime, or Specialist) with a high probability of conversion – removing the majority of the showstoppers experienced in a standard submission.

Ultimately, Pepper Product Selector gives financial advisers an opportunity to demonstrate their value as a trusted source. Not only can they give their customers the confidence of the rate available to them, the maximum LVR, fees, and loan amount on offer against the security, but they can have deeper conversations with their clients about their goals. Conversations like what they are looking to achieve, if they are thinking of growing their family, what the next 5+ years look like - so that they can ensure the solution they put forward supports the customer into future, and they are catered for on all parts of that journey.

How does the Pepper Product Selector work?

Pepper Product Selector helps with searching for and identifying the right Pepper Money product for a client.

It starts by asking the financial adviser a few questions to understand how much the client can afford. It then combines that information with the customer’s credit bureau score to provide a specific Pepper Money product in the form of an Indicative Offer.

Before doing this, advisers need to obtain their client’s consent, as their credit history will be automatically obtained by the tool via a Bureau credit enquiry. This will leave an enquiry on their credit file but will not impact their credit score. In minutes a financial adviser can:

• Calculate the customer’s indicative borrowing power upfront

• Check the customer’s credit history – with no impact to their credit score

• Have an indicative offer for a Pepper Money loan solution – with the product, rate, fees and repayment amount outlined

Following this, if the customer is happy with the proposed solution, the customer and financial adviser can proceed to the application with confidence - attaching a copy of the Indicative Offer letter to the application.

What’s next for Pepper Money?

Pepper Money is dedicated to helping people succeed; it’s at the heart of what we do. We will continue to invest in our diversified products and services, and our digital capabilities to ensure that we continue down the path of meeting a wide range of customers’ finance needs.

We know the most valuable asset our advisers have is their customers – and our most valuable asset is our people. This continued investment in technology and solutions will give everyone a seamless, effortless experience and it will help set our financial advisers up for the future. ✚