TMM ANNUAL MORTGAGE ADVISER SURVEY
by Daniel Dunkley
Advisers face the new world
Advisers are bullish about business survival post-Covid-19, but bank processing and turnaround times remain the top issues for the sector, according to TMM’s annual survey. 2020 has proven to be a year of the unexpected. The Covid-19 pandemic has caused a new global financial crisis, with New Zealand under lockdown through March and April. The economic turmoil has seen the housing market grind to a near-halt, with a devastating impact for advisers. While the pandemic has delivered a massive blow to shortterm profits, advisers remain hopeful that they will survive and emerge from the crisis. Just 10% of advisers said business survival post-Covid-19 kept them awake at night. This year’s TMM Mortgage Adviser Survey underlines some of the key concerns facing advisers in this new and uncertain world. Advisers face a long road to recovery, and Covid-19 is likely to exacerbate some of the existing challenges facing the sector. With house prices forecast by ANZ to fall by 10-15% this year, mortgage advisers have to contend with a downmarket in the near-term. Commission from settlements has plummeted, and Covid-19 could spell more danger than the GFC.
TMM asked advisers for their views on the biggest challenges and opportunities in the market. With banks under severe strain and tightening credit availability, turnaround times and loan applications were highlighted as issues most likely to keep advisers awake at night. Advisers say turnaround times have worsened over the past year and in recent months, as banks cut costs and mortgage staff numbers. Brokers hold out little hope that banks will cut down application times in the year ahead. The new global financial crisis comes as the industry embraces new industry regulation. Transitional licensing has been delayed until next year due to the virus outbreak, but most brokers have made up their minds about which licensing structure to take. 2020 is poised to be a year of significant change for the industry. Advisers expect to place more business with nonbanks and plan to offer new products to clients in the next 12 months. The question of whether to pursue more trail commission is likely to be a bigger issue in the year ahead. • Over 80% of advisers have been in the business for more than two years and whilst that is a positive it may be said that the more we can introduce what advisers do to more of New Zealand then that will also bring new talent into the industry and importantly succession.
Supporting advisers
by Aaron Milburn, Pepper General Manager mortgages.
Pepper NZ is delighted to be sponsor of the annual TMM Mortgage Advisers Survey. As New Zealand's newest non-bank we are committed to supporting advisers and their clients and ensuring most importantly no Kiwi family is sitting at home not understanding what their financial options are. In our opinion they can only get the full set of options from mortgage advisers. We must continue to work together to get the message out about what advisers do and how important they are to the financial sector of New Zealand. Given advisers generate around 37% of mortgage sales vs banks we have a long runway ahead full of opportunities. Pepper NZ will be there with you every step of the way.
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• Turnaround times continue to be the biggest concern and advisers should continue to challenge lenders to invest in technology and back office process improvement to not only assist, but also most importantly improve the customer experience. • It is great to see more advisers having a better year with over 70% seeing an increase in volume and some seeing 25% uplifts which shows more and more Kiwis need advisers’ help and we need to continue together to get the message out there. • For Pepper NZ it is so pleasing to see advisers already sending nearly 3:10 deals to the non-bank sector and even more exciting to read that 4:10 advisers will be looking to the non-banks like Pepper NZ to solve more of their customers' needs.
