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ANZ reveals stance on FAPs

ANZ has laid out its position on the new regulatory regime, stating it will work with adviser businesses and groups that hold a financial advice provider licence.

Monday, October 21st 2019, 7:47AM 8 Comments

The country's biggest lender wrote to advisers on October 17 to state it would "only deal with intermediaries who are lawfully able to provide regulated financial advice to retail clients either under their own FAP licence, or under another entity’s FAP licence".

The bank's position will come as a boost to adviser businesses keen on holding their own FAP licence, rather than working underneath an aggregator group's.

It is understood the lender is happy for dealer groups to have no legal or civil liability for member businesses that hold their own FAP licence.

The system will allow adviser FAPs to operate underneath a group FAP, with the group holding an agreement with the lender.

In the letter to advisers, ANZ said it expected FAP licence holders to "meet industry standards" and show "robust advice and governance processes". The lender wants "appropriate digital security measures and quality assurance controls" to ensure the needs of its customers will be met.

As ANZ prepares for the new regime, it will also review its current Mortgage Adviser Agreement, to ensure it is "fit for FSLAA's purposes", the letter said.

An ANZ spokesman confirmed the details of the letter to TMM Online.

Tags: ANZ FAP Financial Services Legislation Amendment Bill FSLAA licensing regulation

« Mortgage Lab and Kepa plan for new regimeSBS targets big banks with new 2 year rate »

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Comments from our readers

On 22 October 2019 at 9:10 am Amused said:
Thank you TMM for making mortgage advisers aware of this important announcement by the ANZ on the 17th October. The fact that dealer groups have received this communication sent to “advisers” around licensing but have not conveyed it to their own members illustrates that many groups don’t have our best interests at heart. Aside from Newpark the majority of groups want all their members operating under their own group FAP licence going forward. ANZ’s announcement is a potential game changer now for the mortgage adviser industry going forward.

ANZ been the largest lender in the country has just signalled to the industry that Mortgage advisers who are deemed fit by the FMA to hold their own licence and become a FAP will be able to have direct lending agreements with them. ANZ confirmed this to me yesterday. This is a logical & well thought out decision made by ANZ. ANZ understands that the adviser is the one giving the advice to the customer, NOT the dealer group the adviser belongs to.

Dealer groups going forward are clearly going to have to demonstrate value to their members beyond traditionally just enabling them to hold relationships with the various banks & insurers. The insurers have already signalled that they will continue to allow direct agreements with insurance advisers as long as they have their own FAP. This is yet another example of the increasing obsolescence of dealer groups when advisers are able to hold direct relationships with providers.

Of course many advisers have now tied themselves to their group by them been completely dependent on their cloud based CRMs to operate their businesses. Reading ANZ’s comments about them wanting FAPs to have “appropriate digital security measures” going forward I can’t help but think that the banks are now finally waking up to the privacy implications of mortgage advisers using group owned cloud based CRMs especially those groups with overseas owners. Are all mortgage advisers who are currently using a group owned CRM telling their clients about the third parties overseas who are in receipt of their personal and financial information?

I said banks earlier because with ANZ been the largest lender in the country and thus having the biggest market share of business from mortgage advisers the likes of ASB and Westpac will now inevitably follow ANZ’s lead. The smaller lenders will join the herd also. This just leaves BNZ then who now have to decide whether they want to alienate themselves with mortgage advisers and insist that we all have to operate under a dealer group’s FAP just to be able to send them business.

Well done ANZ!
On 22 October 2019 at 12:37 pm valkyrie6 said:
So correct me if Im wrong ,BNZ make it compulsory for advisers that belong to a certain large dealer group ( that is owned by overseas land agents ) to put all of their customers personal financial information through the groups cloud based CRM ? and hardly any of the advisers are declaring this to the consumer in their disclosure statements ?
Isn't this a straight out breach of privacy ?
On 22 October 2019 at 2:44 pm Andrew Scott, GM Newpark said:
Newpark Home Loans welcomes the pragmatic position ANZ have taken on the issue of licensing Advisers and look forward to working closely with the bank for the benefit of our Advisers. We would also like to think that Newpark has played an prominent role in this decision that highlights the importance of self-licensed Advisers retaining their independence and autonomy when in front of their clients.

@Amused also makes a very valid observation that the spotlight will now go on dealer groups that charge a business multiple fees for what is really just mortgage commission administration.

Value is always subjective and unsurprisingly in the eye of the beholder. Newpark has long understood this and will continue to advocate long into the future on behalf of all Advisers.

In exchange for the one fee that we do charge a business, Advisers get assistance with the licensing process, an arms-length supplied compliant CRM, a diverse range of lenders & ancillary suppliers, and a formal practicing certificate program.

Value is only quantified when a dealer group makes business as usual 'easy' for the Adviser and we're very happy that this will continue to be our core focus.
On 24 October 2019 at 6:20 am JPHale said:
@Amused, here here.

As you and Mr Scott have pointed out, value from dealer groups is going to be a bit of a spotlight.

It always has been at some level, with many advisers focused on the $ returned to them.

Dealer groups that remain focused on the $ returned to the adviser are going to find things a little conflicting, and the new regime is challenging both their value and their relevancy.

Frankly ANZ has had the advantage of a long sustained beat up from the FMA, so their decision is not really a surprise, with the FMA likely strongly suggesting some guidance around their approach and engagement with the market.

Either way a great result for the advice industry and one many of us have been vocal about ensuring we see the changes desired and the compliance with the law.

My sources have more recently suggested that BNZ is reconsidering its position to follow in ANZ’s footsteps. I look forward to seeing this in due course too.
On 24 October 2019 at 6:29 am JPHale said:
@valkyrie6 the privacy piece is only an issue if the CRM data is being accessed outside the remit of the adviser/dealer group agreements.

If that data is being mined for other purposes, then yes, there is an issue. Though probably a stretch in the scheme of things as the NZ and Aussie businesses with the one you're suggesting have a common link.

The more important piece on privacy is the adviser conduct. How many advisers have privacy sign off on release of information for their businesses?

This is required to submit an application to a provider. It may be implied by completing an application form, most give authority for the advice business to release information to the provider, but they don't have the authority to release the application form to the provider so they have the authority to ask for information.

This may sound like semantics, but the sending of the application form without authority to do so is a client privacy breach. Implied or otherwise.

Yes, I know it sounds crazy, but it is the law on this.
On 24 October 2019 at 11:23 am Seehydenorhair said:
Too many levels of association being lined up Profesional association/DealerGroup/Complaints/FMA/MBIE.
The only consistent is every time something changes the fees go up or new fees come in.
On 24 October 2019 at 1:11 pm valkyrie6 said:
@JPHale I agree regarding your comment around adviser conduct but I think you may have missed my point that customers are not being told their personal and financial information is being processed through overseas owned CRM systems ( some owned by land agents and I think information is being mined ) with out their knowledge and agreement , minimum advisers need to disclose in their disclosure statements where the customers personal information is going ( I bet 90% do not) and whom or who owns that company and confirm all third parties in receipt of the clients personal information ,then the customer can make their own decision weather they want to engage that adviser , the customer has the right to know who is receipt of their personal information and if any of the banks are party to this behavior surely they are guilty by association, isn't this a basic breach of the privacy act in NZ ?

On 31 October 2019 at 4:59 pm JPHale said:
@valkyrie6 I don't disagree, however, I would suggest the advisers themselves don't really know most of the time to be able to disclose it.

There is also the question about proof that the mining and breach of privacy is happening. The above needs tidying up first, the reality is this is somewhat part of the darkweb as those doing things in the background won't be forthcoming about data mining things.

And there is the aspect of trust too, if we don't trust anyone we struggle to have any industry co-ordination.

There's the argument about inhouse systems and access controls, except that even these approaches today have exposure issue most are not aware of.

It's not going to be an easy one to deliver on as you have suggested, while at the same time, that's probably exactly what should be happening.

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.14 6.75 ▼6.39
ANZ 8.64 7.74 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.14 6.79 6.65
ASB Bank 8.64 7.14 6.75 ▼6.39
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - ▼7.14 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 ▼7.74 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - ▼6.79 - -
Co-operative Bank - Owner Occ 8.40 ▼6.99 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 ▼7.49 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.89 6.55 6.35
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 ▼6.69 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 7.99 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 6.99 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 8.09 7.59 7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 9.09 8.59 8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 ▼7.74 7.29 6.59
SBS Bank Special - ▼7.14 6.69 5.99
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 ▼6.14 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 7.79 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 6.99 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - 6.55 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.89 7.35 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.75 6.65
Median 8.64 7.21 7.29 6.65

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