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NZFSG and Kepa announced their merger this month, a transaction which will create a national dealer business with more than 1,600 members, settling $17 billion of mortgages and issuing $30 million of life insurance premiums.
As the dust settles from the group's announcement, advisers have privately expressed concerns that the deal will reduce competition in the adviser space.
Advisers have contacted TMM Online over fears that the combined NZFSG-Kepa organisation will have too big a share of the market, and are concerned that there will be reduced choice for mortgage brokers as sector consolidation continues.
Brokers fear the dwindling choice in dealer groups may lead to increased costs for adviser businesses.
"NZFSG already had a massive share of the market, so I'd be amazed if this wasn't being looked at by the regulators," one adviser said.
It remains unclear how much market share the combined group will control if the merger goes through.
The takeover deal is subject to Overseas Investment Office and New Zealand Commerce Commission approval. The two companies expect the deal to be settled by October 30.
TMM Online asked the Commerce Commission whether the deal had already been given the green light.
"We have not received an application for clearance but we are aware of the transaction," the Commission said on Thursday.
TMM Online asked NZFSG whether it expects to receive regulatory approval by the end of the month, but the firm did not respond to a request for comment.
The competition concerns come as larger groups headquartered overseas, such as Astute Financial Management, consolidate the NZ broker market.
Further consolidation is expected due to rising demands under the new financial advisers' regulatory regime.
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What these advisers that are "privately expressing" their concerns- they should come out of the shadows and be counted. There is a reason why advisers (myself and my business associate) gravitated across to Kepa and or the NZFSG aka the "G" and that had a lot to do with their respective service propositions. Their combo commitment to the new and improved financial services regime- to advisers continuing education- compliance and to effective governance management. If FMA and or one of the other regulatators e.g. the commerce commission had a look at Kepa and or the "G" I would place money on the table they would both score close to 100%- how would the others do??? Plus, Kepa and the "G" they do not set about screwing over their advisers network- in some cases the others deduct upwards to 35% of the upfront commission (for what) +++ adding on to that the costs of a CRM.
Me and my associate are proud members of the "G" - my view is that those that chose to criticise they should come forward (public) and or stay they should stay beneath their little rocks- hmmmmmmmmmmmmmmmmmmmmmmmmmm.
Noel Bowl