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Mortgage advising should become a profession

Mortgage adviser and chartered accountant David Green says it’s time the industry turned into a profession.

Wednesday, June 21st 2023, 12:31PM 4 Comments

by Sally Lindsay

Green, the owner and managing director of AdviceHQ, says level five  of the New Zealand Certificate in Financial Services is a good step in the right direction, but it would be great if one day mortgage advising became a profession.

For that to happen, it would need mortgage advisers to be degree qualified and do some sort of post graduate study, he says.

“I think if it is to be called a profession we need to go down that track.”

Wellington-based financial planner and mortgage adviser Craig Pope of Craig Pope Financial says advisers need to upskill themselves.

He has been working through the investment strand paper to add KiwiSaver to the list of services his business offers. He says it is, however, easier said than done.

“Running a mortgage business and trying to find the time to finish the investment strand is difficult.

“I take my hat off to advisers that manage to combine insurance and mortgages work because they are both quite complex.

“To be honest, I think advisers are better off being really good at what they do, be it mortgages for first time buyers or investors and have really good mechanisms and referral partners that can help clients with insurance or KiwiSaver,” he says.

Pope thinks advisers can be doing more hand on servicing for clients. “Budgeting and money planning and advice and a broad understanding of insurance and KiwiSaver.”

Too much red tape

Green says one big issue facing mortgage advisers is the amount of red tape in the industry, for example the CCCFA legislation, which doesn’t represent the conversations that brokers have with clients.

“The CCCFA doesn't feel too generous, even though it has been relaxed,” he says.

Green believes the legislation is aimed at the lowest common denominator – a truck loan. “The sort of rules that should apply to a truck loan shouldn't really apply to a mortgage.”

He says this is demonstrated in the delinquency and arrears rates between truck loans and mortgages. The difference is vast, Green says, and there's no mad rush of mortgagee sales or anything like that.

“When the CCCFA legislation was introduced, there wasn't actually a need for it in the mortgage space, perhaps in the truck loan space, and perhaps special lending. There weren’t any issues with mortgages, particularly with the controls the RBNZ and the FMA have in place.

“Was there a need for the CCCFA legislation for mortgage lending? I don't think so. It's just more red tape, to be honest. It's completely unnecessary.”

Tags: Mortgage Advisers

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Comments from our readers

On 21 June 2023 at 2:22 pm Veteran Charles said:
I dont get that. Most of what we do is based on a lifetime of experience and savvy that comes with years of hands-on work in varied environments and conditions. Are they going to teach that in a Masters program? 99% of people using brokers could not afford the level of attentiion and technical expertise that Mr Green implies. We are not chartered accountants dealing with chartered accountants - we deal on the same level as the bank assessors and their bosses. In my case if I had been bright enough to become a CA, I would have done exactly that but it became to abstract for my brain.
On 22 June 2023 at 10:02 am valkyrie6 said:
David, respectfully before you start calling on mortgage advisers to hold more academic credentials and for the industry be a “profession” (funny I thought we were already?) you should ensure that your own online disclosure statement is up to date. Yours is saying you are still working under a transitional license….
How can a chartered Accountant also be a full-time mortgage adviser and be an expert and competent in both, and financially why would they want to be? .

On 22 June 2023 at 10:27 am Amused said:
I agree with Veteran Charles’s comments. Some mortgage advisers operating in the industry now have over 20+ years’ experience and that level of expertise simply can’t be taught via a degree although I'm sure that the education providers would love to tell us all otherwise. And respectfully before people start calling on mortgage advisers to hold more academic credentials, they should really ensure that their own disclosure requirements associated with licensing are up to date. Looking at Mr Green’s disclosure statement online this morning it’s saying that he is still working under a transitional license…
On 23 June 2023 at 2:26 pm Andy the adviser said:
Veteran Charles, Valkyrie6 and Amused: I totally agree with all your comments.

Having over 35 years experience in the industry myself, I felt degraded and worthless having to complete the mortgage strand of the new academic requirement. Not only was it far from adequate (not fit for purpose), the case studies were unworkable, the ratios not used here, and the course was based on the Australian banking and adviser system, so was in no way relevant here. It also covered areas that we are not allowed to cover here.

So I am now staring at a $1200 certificate that is totally worthless, and serves to do nothing more that line the pockets of some bureaucrat!

If I can use a comparison, this qualification would be akin to us having to prove the alphabet, despite us having known it since we were 4.

We are already professionals (and I would hope all behave as such), so I fail to see how much more we could get qualified.

Further - the banks and bureaucrats are changing the rules so regularly that any formal qualification is going to be out of date within a week.

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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 7.74 7.35 6.99
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 7.65 7.25 -
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 ▼7.09 ▲6.95
SBS Bank Special - 7.14 ▼6.49 ▲6.35
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 7.84 7.35 6.99
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.24 6.75 6.39
Median 8.64 7.19 7.17 6.65

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