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NZFSG merges with Kepa

NZFSG has taken over rival group Kepa, as adviser businesses consolidate ahead of the new regulatory regime. 

Thursday, October 1st 2020, 8:56AM 2 Comments

The nation's biggest broker group, NZFSG has effectively completed a takeover deal. Kepa's mortgage business will become part of its larger rival, marking the latest phase in industry consolidation.

The two groups have been in talks for several months, TMM Online understands.

Kepa’s members will be integrated within the NZFSG-Loan Market dealer network. Kepa advisers will be given the option to move onto NZFSG's MyCRM system, while Kepa’s staff will transfer to the merged business. 

Kepa’s general insurance arm will remain with Kepa’s holding company, Kepa Financial Services. The assets are expected to be divested, and KFS eventually wound down.

The deal is subject to regulatory approval. The Overseas Investment Office and New Zealand Commerce Commission need to give the deal the green light, but the two groups expect settlement by October 30.

Both parties believe the additional scale will help under the new financial advisers' regulatory regime, which will place greater demands on groups acting as Financial Advice Providers for their members. 

In a statement, the two groups said the deal would create a national dealer business with more than 1,600 members, settling more than $17 billion of mortgages and issuing $30 million of life insurance premiums each year.

NZFSG chief executive Brendon Smith said: “With the industry facing complex and sweeping regulatory changes, including the delayed introduction of the Financial Services Legislation Amendment Act (FSLAA) and the pending Financial Markets (Conduct of Institutions) Amendment Bill, New Zealand’s independent financial advisors are facing an increasing compliance burden.

“By combining our respective businesses and expertise we can support advisers to navigate these changes with the added benefits of genuine scale."

The merger comes as other groups, including Astute Financial, attempt to consolidate, striking deals with Mortgage Express and The Mortgage Supply Company over the past two years.

 

 

 

Tags: NZFSG

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Comments from our readers

On 1 October 2020 at 11:42 am valkyrie6 said:
Questions …. feel free to answer.

How does the FMA feel about 1600 advisers operating under one Australian owned dealer group FAP license?
How could such a large group be responsible under one FAP license for the advice given by 1600 advisers? the adviser is the one giving the advice to the consumer.
Does a large group of this size now think it can charge advisers whatever it’s wants regarding “compliance fees “admin fees “membership fees” commission share fees “fees in general?
This Group mentioned that via this take over they will have larger bargaining power with product suppliers, are they referring to what deals they can negotiate for themselves regarding referral fees/ override commissions for the group ,or are they referring to what they can negotiate for the advisers /members /customers ?
Are advisers in New Zealand now lacking in choice when it comes to a dealer group and forced into using an overseas group/systems based offshore?
Why is it still compulsory from banks for advisers to be under a dealer group when the whole concept behind the new regulation is to improve the financial advise industry and once advisers under their own FAP license are fully up and running will be in the best shape the industry has even been in.
Is this now a monopoly by overseas investors in the New Zealand dealer group market, how does the Overseas Investment Office and NZ Commerce Commission view this?
How do current Kepa advisers feel about being under a dealer group that competes directly against them under their own Loan market brand?
Does this have an influence on the New Zealand consumer having such a large Australia owned dealer group and the big four banks being Australian owned.?
On 5 October 2020 at 9:14 am Amused said:
Great comment made by valkyrie6 with some excellent questions been asked.

Like her I can’t see this news been a good development for the mortgage adviser industry as a whole. Been told by one of the bank’s loan assessors on Friday that their team alone currently has 600+ applications deferred due to missing information not been supplied by mortgage advisers it’s obvious that dealer groups in their rush to grow their membership numbers have not bothered to take on people who actually understand how to put together a mortgage application. No wonder bank turnaround times have now stretched out to 10-14 days. Time for the banks themselves to start culling some of these so called mortgage advisers who apparently aren’t even able to attach basic information i.e. bank statements or evidence of income with their applications to enable bank assessors to promptly provide an offer of finance to customers. If these individuals (both new and experienced advisers I am told) can’t get the basics right they shouldn’t have an accreditation with any of the banks.

Unfortunately as know the priority for most of the mortgage aggregators nowadays is not their mortgage advisers but the amount of insurance (API) been written in their various adviser’s businesses and the corresponding level of override commissions been earned for the head group. Having to disclose to a customer that the new overseas owners of a dealer group you work under are receiving remuneration from their new insurance policy probably isn’t going to sit very well with the vast majority of New Zealand consumers. And of course there is the small matter of making sure also that your customer is fully aware their personal and financial information is now been held by the overseas owner of the dealer group which in the case of this article above is an Australian real estate company. In case the penny hasn’t dropped yet use of the new group owner’s cloud based CRM will be mandatory for all current Kepa members who want to operate under the new group owner’s FAP licence. Other mortgage aggregators available i.e. New Park Home Loans don’t make it compulsory to use a dealer group owned CRM and actually encourage & support their advisers to obtain their own FAP licence

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AIA 4.55 2.55 2.69 2.79
ANZ 4.44 3.15 3.25 3.39
ANZ Special - 2.55 2.69 2.79
ASB Bank 4.45 2.55 2.69 2.79
Bluestone 3.49 3.49 3.49 3.49
BNZ - Classic - 2.55 2.69 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 3.15 3.29 3.39
BNZ - TotalMoney 4.55 - - -
CFML Loans 4.95 - - -
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China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland 3.95 2.89 2.97 3.39
Heartland Bank - Online 2.95 1.99 2.35 2.45
Heretaunga Building Society 4.99 3.50 3.40 -
HSBC Premier 4.49 2.45 2.60 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 3.69 2.45 2.65 2.79
Kainga Ora 4.43 2.93 3.07 3.24
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.40 3.30 3.54 3.54
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.55 2.79 2.79
Liberty 5.69 - - -
Nelson Building Society 4.95 3.45 3.49 -
Pepper Essential 4.79 - - -
Resimac 3.39 3.35 2.99 3.35
Lender Flt 1yr 2yr 3yr
SBS Bank 4.54 3.05 2.99 2.99
SBS Bank Special - 2.55 2.49 2.49
The Co-operative Bank - First Home Special - - - -
The Co-operative Bank - Owner Occ 4.40 2.55 2.69 2.79
The Co-operative Bank - Standard 4.40 3.05 3.19 3.29
TSB Bank 5.34 3.29 3.45 3.59
TSB Special 4.54 2.49 2.65 2.79
Wairarapa Building Society 4.99 3.55 3.49 -
Westpac 4.59 ▼3.09 3.29 3.39
Westpac - Offset 4.59 - - -
Westpac Special - ▼2.49 2.69 2.79
Median 4.55 2.94 2.99 2.80

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