Finding new members a sign of the times
The Financial Services Federation (FSF) has spread its wings in an attempt to attract new members.
Tuesday, April 4th 2023, 9:01AM
by Sally Lindsay
A non-profit organisation, the FSF has traditionally represented a broad cross section of non-bank lending organisations such as Prospa, Avanti Finance and the finance arms of motor vehicle brands BMW, Nissan, Mercedes-Benz, Toyota, and Honda.
FSF executive director Lyn McMorran says it is now open to broker personal finance companies which have a Financial Advice Provider Licence and operate in the responsible loan sphere.
“Brokers and financial advisers are an integral part of the responsible lending system in ensuring good outcomes for consumers and businesses from the outset,” she says.
Newmarket-based Loansmart is the first broker company to be accepted as an associate member of the FSF. Managing director Murray Greig says he is happy to be alongside an organisation that promotes fair and ethical lending.
“The broker market is expanding quickly as clients look for impartial advice to assist with their financial requirements,” he says.
McMorran says a few financial advice companies have approached FSF about membership, many wanting to understand the intricacies of the Credit Contracts and Consumer Finance Act, which is an area of expertise for the FSF, among other things.
McMorran, who heads the nearly 60-year-old federation with around 90 members, says the biggest disruption in its history has been the CCFA changes and their effect on every member organisation. “The amount of information needed by lenders now is incredible. It takes a lot a lot longer to put an application together for it to often end in a decline,” she says.
So, key for membership, she says, is knowing those applying are responsible lenders.
To get a feel of companies applying for membership, the federation talks to the Disputes Resolution Service, FinCap, Commerce Commission and looks at the websites of the lenders.
“You can tell fairly quickly whether or not they are responsible,” she says. “It is quite a detailed due diligence to become a member.”
McMorran says the federation will be moving slowly on new membership applications from financial advisers so its brand and reputation is not tarnished by rogue lenders. “It is quality rather than quantity,” she says.
McMorran says it’s hard to know how many non-bank lenders there are in New Zealand in total. The Reserve Bank regulates 18 non-bank lending institutions, which lent out nearly $20 billion last year. It doesn’t regulate or supervise non-deposit-taking finance companies.
The federation does not admit individual broker members. They join Financial Advice NZ, which has 1,800 members mainly across the financial, mortgage and insurance advice industries. There are 8,800 registered financial advisers across the country.
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