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Portals for home loan applications? Be careful what you wish for

A mortgage adviser who has worked in both Australia and New Zealand isn't a fan of the Australian system which accept mortgage applications through an old portal and says much depends on the portal.

Wednesday, June 19th 2024, 7:02AM 3 Comments

In a further submission to the Commerce Commission's market study of competition in personal banking services, Finance and Mortgage Advisers Association of New Zealand (FAMNZ) country manager Leigh Hodgetts for all lenders to agree on a common online loan application portal, as is done in Australia.

Hodgetts said having to email loan applications in NZ “is very inefficient” and can result in clients missing out on buying opportunities.

But Wellington-based adviser Andrew Perry says in his submission published this week following last months' conference hosted by ComCom that has been tried and failed in NZ.

“We have seen portals operated in market in NZ in various forms since I started working as a broker in 2016 – two major banks and one large non-bank lender in NZ all offered these portals in the past, but no longer do so due to the additional labour it imposed on those submitting applications,” Perry says.

“These needed to be prepared both via broker CRM (client relationship management) and then again via the portals,” he says.

“All three of these lenders have removed the requirement for portal submission subsequently and all have seen submission volumes increased, based on anecdotal evidence, due to the reduced hours by not using these portals.”

Perry, who owns a boutique brokerage in Wellington, says the market for mortgage software has become increasingly competitive over the last eight years which has resulted in “superior offerings for brokers/advisers tailored to consumer needs.”

In Australia, one company, ApplyOnline, captured the market early and this “legacy software” has been the default provider for about 20 years.

It was made compulsory for brokers but is “largely unusable,” he says.

“In my experience, the overwhelming majority of ApplyOnline users were based offshore in the Philippines and contracting to Australian-based businesses to load applications that had been emailed to them,” Perry says.

“This is a model which is inefficient, causes delays and reduces competition,” and which won't work in NZ where brokers mostly aren't paid trail commissions.

But he also worked with portals of major banks and, while he doesn't feel it had much impact on customer outcomes, “it did provide a superior service for customers via the broker channel compared to the current process in NZ,” he says.

“Portals which enable brokers to give better information to consumers are useful; those which delay submission are not.”    

Perry also complains that the “onerous regulatory environment” has meant that innovation has been “put on the back-burner,” with advisers having to modify software to comply and meet future audit requirements, rather than focusing on the needs of home loan borrowers.

In this, Perry is supporting ComCom's contention in its draft report that regulation is one of the factors stifling competition for personal banking services, although its focus has been more on the prudential regulator, the Reserve Bank, rather than on the conduct regulator, the Financial Markets Authority (FMA), which has much more contact with financial advisers.


« FAMNZ to ComCom: don't fix what ain't brokeSqueezed between a rock and a hard place »

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Comments from our readers

On 19 June 2024 at 11:32 am Amused said:
The future for all mortgage adviser applications in NZ is to have the bank/lender provide an online portal which the adviser can access via their individual accreditation and send their client’s loan application to. You only have to look at how well online life insurer portals like Partners Life’s MUM work currently for insurance advisers to know that this is the future also for mortgage advisers here.

Unfortunately, many of the aggregators in New Zealand don’t want the banks to offer these online portals to mortgage advisers because it’s the next logical step at least for those advisers now with their own FAP licence to be dealing directly with the banks without any aggregator involvement. The aggregators knowing this want any bank online portal introduced to also talk to their own CRM. It’s 2024 now and it’s about time that banks here started investing money in the adviser channel offering an online portal without any aggregator involvement and honouring their earlier pledge to deal directly with those mortgage advisers who have their own FAP licence.

A bank online portal for mortgage advisers also has the added benefit of the client’s personal and financial information been safeguarded from access by an unauthorised third party whilst it’s sitting in an aggregator owned CRM. This keeps both the adviser and the bank 100 percent compliant with their Privacy Act obligations, something that lenders in Australia are very focused on currently.
On 19 June 2024 at 6:52 pm Andy the adviser said:
Well said, Amused.

Our expenses have gone up, yet our commission has not changed in 20 years. I welcome any option where we can cut costs, and a (good) adviser portal is a great option.

The aggregators seem to have become too big for their own good, and are only clipping the ticket to serve their own purpose. And the banks have welcomed this. Sovereign (now AIA) have coped very well to the adviser channel by not demanding deals be submitted through an aggregator.

Where the responsibility for poor home loan approvals an advice lies is a very grey area now. Is it the Adviser, the FAP, the Aggregator, or the Bank? At the end of the day, the BANK has the final say, and can undo all and any advice the adviser advises.
On 20 June 2024 at 9:07 am valkyrie6 said:
Banks are basically lazy, aggregation groups for home loans (now called Master FAP’s) in most cases are glorified pay clerks and only exist because lenders say its compulsory to belong to one, why ? because it’s easy for banks to pay one account instead of 2,500.

What this actually does is creates a monopoly where “master FAPs “have an open invoice to charge advisers what ever they choose too, these dealer groups can also implement systems , CRM’s , compulsory insurances, and lending deals that make advisers as sticky as possible so they can’t leave and if they do the group can keep trail commissions , client application data and in some cases where a group has its own branded mortgage advisers it will market to those customers once the adviser has gone.

Not sure how this is operating in the best interests of the consumer, ComCom and FMA should be investigating this monopoly.

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 ▼6.85 ▼6.49 ▼6.35
ANZ 8.64 ▼7.45 ▼7.09 ▼6.95
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - ▼6.85 ▼6.49 ▼6.35
ASB Bank 8.64 ▼6.85 ▼6.49 ▼6.35
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 - ▼6.85 ▼6.49 ▼6.39
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 ▼7.45 ▼7.09 ▼6.99
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 - ▼6.59 - -
Co-operative Bank - Owner Occ 8.40 ▼6.79 ▼6.49 ▼6.35
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 ▼7.29 ▼6.99 ▼6.85
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 ▼6.69 ▼6.35 ▼6.15
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 ▼7.50 ▼7.25 -
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 ▼7.75 ▼7.39 ▼7.19
Kiwibank - Offset 8.50 - - -
Kiwibank Special - ▼6.85 ▼6.49 ▼6.39
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 ▼7.25 ▼6.90 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 8.74 7.74 7.09 6.95
Lender Flt 1yr 2yr 3yr
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 ▼7.65 ▼7.29 ▼7.19
TSB Special 8.64 ▼6.85 ▼6.49 ▼6.39
Unity 8.64 ▼6.85 ▼6.49 -
Unity First Home Buyer special - ▼6.45 - -
Wairarapa Building Society 8.60 6.95 6.85 -
Lender Flt 1yr 2yr 3yr
Westpac 8.64 ▼7.45 ▼7.09 ▼6.89
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - ▼6.85 ▼6.49 ▼6.29
Median 8.64 7.07 6.85 6.39

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