1 Comment 1 CommentRaboDirect acting general manager John Baird says there is a space for the bank in this market as other banks don't actively promote their term deposits to advisers.
"No-one really seems to be playing in this area."
He guesses this is because banks have huge term deposit books, and the adviser space would be on a small proportion. While RaboDirect's total book sits at $3.3 billion it is small compared to the trading banks and the adviser space looks like a good fit for the bank, Baird says.
He says RaboDirect will be appealing to advisers as it is a AAA-rated bank and often has the best rates in the market.
Also the bank, which uses money raised to fund its rural lending in New Zealand, is working on rebuilding its banking platform. When this is completed it will offer some additional benefits, such as being able to account for joint investors on different PIRs at each investor's individual rate.
The bank is also developing some technology in Ireland which, when implemented in New Zealand, will allow advisers to manage investors' accounts from their office.
He says these tools will help advisers service their clients and will allow them to set up and manage accounts.
RaboDirect won't be paying advisers commissions or trails so its offering is likely to appeal to fee-based advisers in particular.
However, since the finance company meltdown the many more advisers are using bank term deposits in portfolios even though there is no commission income.
RaboDirect had looked at other areas where it could grow its business, such as offering transactional accounts, but choose to work in the adviser market instead.
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I have been recommending some of their products to clients for a while, who have gone direct to them.