Credit crunch hits NZ brokers harder than Aust

Australia-based Plan has announced a major restructuring programme aimed at cutting costs and increasing revenue. The group is moving from a commission-sharing payment system for mortgage brokers to a fixed monthly fee of $400 plus GST. The company has axed the position of national manager in New Zealand resulting in redundancy for one of the industry's best-known executives, Julie Stevens, after seven years with Plan.

Ray Hair, chief executive of Plan NZ said that the New Zealand mortgage market had been hit harder by the credit crisis than Australia's. The value of loans settled by Plan in Australia had fallen by 20% over the year to May but had fallen by 43% in New Zealand.

Hair said that credit criteria had been tightened more severely in New Zealand than Australia where it was still possible to borrow at a loan-to-value ratio of 90%. He believed that lenders had expected a sharper deterioration in the economy in New Zealand than in Australia.

Plan had been forced to reorganise its cost structure to deal with the state of the market. Hair said he was confident that the new fee structure would strengthen the group's position in the long term. He expected it to lead to the departure of about 30 brokers from the group, bringing the total down to 150. But Plan wanted to grow the business and expected to be marketing again shortly.

The new fee structure is designed to reward brokers writing larger volumes of business. Plan has not changed its fee structure in Australia but Hair said that top-performing brokers in New Zealand had said that they wanted firm control over their costs. The higher-producing brokers felt that under the commission-sharing regime they were subsidising lower-producing brokers.

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On 15 July 2009 at 3:33 pm Rosemary Rayner said:

Very sad to see PLAN axe Julie Stevens, she has been a very supportive executive to PLAN members, It was her support that encourage me to join PLAN,But with this change of fee structure,I might have to relook at membership.Only joined this year.

Credit crunch hits NZ brokers harder than Aust

The depth of the slump in the New Zealand mortgage market has been underlined by a 43% drop in business loan volume suffered by leading broking group Plan over the last year.

Wednesday, July 15th 2009, 5:03AM 1 Comment

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