The bank is working on growing its presence in the advice market, with new tools and support for those dealing with its products.
“We’ve taken that strategic decision probably about 18 months ago,” SBS Wealth chief executive Morne Redgard said.
“We’ve always been a B2C business, direct to consumer, and that's kind of how the business was built and ran for 20 odd years.”
He said SBS had previously had a small advice offering through the bank and bank channels but it had decided to move out into the adviser world, too.
“We’ve done that for a couple of reasons. One, we've always felt that we are, or our origins have always been, an advice business. We're an advice business first and foremost.
“Our vision for the business and for the industry is to make financial advice accessible to more New Zealanders. That's why we get out of bed every day. And that's what we want to do.
“The problem in doing that when you're not one of the bigger players is your scale. So we know that the only way that we can actually be successful in taking advice out to more New Zealanders is if we spread our wings wider and embrace the adviser market. And that's what we've decided to do.”
He said SBS wanted to build an adviser channel that made it economically viable for advisers to look after people whose KiwiSaver balances were less than $100,000 or $200.000.
“Advisers traditionally would advise high net worth people and high net worth families, because it can be an expensive service to offer out. The people that were losing out were essentially the retail people.”
He said it also wanted to offer a channel or advisers that would give them confidence that they were “100 percent compliant”.
“Because if you've got 600 clients or 700 clients, and most of those are in that retail space, the chances are they're not getting annual checkups, they're not getting many contact points.
“So building a platform that automates that process and makes sure that the communication is being done and the clients are getting the advice value that they deserve, but haven't been getting over the last, well… forever, to be fair.
“And this is not a New Zealand problem, this is a global problem. So that's what we're doing with the advisers now is we're building their channel out, we're building our tools out at the moment, which will go out shortly.”
He said the tools would first be tried in direct-to-client markets and then with advisers over the next six months or so.
SBS has signed up 23 advisory firms so far, mostly working with KiwiSaver.
“We’re probably taking a slightly different stance to this platform, which is going to be adviser tools, communication tools and the like. Up until now... you’ve had to go out and pay for those tools on an annual basis.
“We believe that value can be added in those tools by getting this out to the clients. And our monetisation model is in running the business in the background, in the KiwiSaver scheme ourselves. So it's not something that we're going to be charging.
“It's not a SaaS model. So we'll be providing this platform out and adding value to the advisers who then take that value to the clients. And there won't be a SaaS commercial model around that, it'll be partnering with them, getting them to use the underlying products.”
He said it came from a core desire to see more New Zealanders getting advice.
“All of this comes back to how do we scale advice, how do we get more people in New Zealand through the advice process? If you look at some of the data that's been done, we know that people have better outcomes once they access advice,” Redgard said.
“So how do we get more people through it? And this is not an SBS thing, it's an industry thing. We need to work together as an industry, that's why we've decided to go out to the advice market and engage the IFAs, the mortgage advisers, the people that control the primary relationships with clients. How do we get through that channel to the end client and assist these individuals in broadening and scaling advice across New Zealand?”
SBS would be paying commission, but Redgard said he would like to see some standardisation across the sector of what was being paid.
“There are some providers out there that are paying massive commissions, almost buying market share, which I suppose … that's how business works. But I think it is driving some poor behaviour.
“It would be good to get a standardised structure.”
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