The mortgage adviser space is undergoing some heavy change, and according to the industry, public perception of the role still remains one of its biggest challenges.
As the industry evolves to demonstrably place clients at the front and centre of every transaction, getting that message across to the average homebuyer has proved more difficult. NZ Adviser spoke to mortgage advisers from across the sector, who discussed how the ongoing changes in compliance and lagging public perception is affecting how they go about their role.
The biggest issue for us is still the public’s perception of the role of a mortgage adviser,” Twine Financial Advisers managing director Eugene Bartsaikin told NZ Adviser.
“The terminology has changed from ‘broker’ to ‘adviser’, but a large cross-section of the general public still assumes the broker is about getting the lowest rates. Most of my time is instead spent on helping my clients structure their loans instead, whether that be focusing on debt-repayment, building up an investment portfolio or helping protect the cashflow from the portfolio.”
I think the upcoming legislation changes are on a lot of advisers’ minds at the moment – especially the concerns about the increased costs of remaining compliant, and potentially reduced commissions,” Mainland Mortgages & Insurance adviser Kylie Connor added.
“In my view, the role of a mortgage adviser is so important as it gives clients advice across several different options, rather than trying to make them fit in to one small box within one bank. Hopefully any changes following the Royal Commission and any investigations in New Zealand keeps this in mind when reviewing advisers. I think I can speak for most advisers when I say that our main focus, always, is doing what is right for the person in front of us.”
Bartsaikin says that despite the changes happening in Australia, the current system in New Zealand is not in need of reform – only of a tightening of standards, which the Code of Conduct and FSLAB legislation has gone some way to address.
“There is always the risk of commissions being tampered with by the regulator, but in my opinion, the current model isn’t broken,” Bartsaikin said. “I’d personally prefer a lower up-front and trail component like at BNZ and Westpac, since our business model is based on building long term relationships with our clients rather than transactions.”
“In terms of the overall standard of the industry, the new Code also needs to do more to elevate the standard of Registered Financial Advisers. This is especially important for the borrowers who have had a bad experience with one broker, they fail to see how another could be better and have lost interest in working with advisers altogether.”