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New next for mortgage advisers

Hamilton-based Nest Home Loans is aiming to go national with a series of franchised operations across the country.

Founders, Jeff Kerwin and Richard Petersen, say their franchise business model will turn the industry on its head.

Nest Home Loans has the potential to provide new competition in a field dominated for years by Mike Pero Mortgages. Although Kerwin doesn’t view Mike Pero as competition.

He says the sector has a strong future as mortgage advisers account for an increasing amount of loans originated each year.

“I think as time goes by, more and more consumers will turn to mortgage advisers instead of going straight to the bank as their first option.”

Kerwin’s aim is for advisers to be able to grow a business that offers a better work/lifestyle balance.

He says many successful advisers often find themselves working up to 60 hours a week in a room by themselves.

“They are unable to get away from their customer’s finance dates and take a holiday, which is a steep price to pay for success.”

In order to achieve that Nest has invested heavily in technology, systems and processes, having the right staff in the right areas, and a focus on a great customer experience.

Nest have built their own CRM software that is only for use within the Nest Home Loans network.

“The CRM software hasn’t been seen by many people, but those who have seen it have said its better than anything they have seen in the market. It is fully workflow driven and is designed to deliver the client and adviser a high quality and replicable experience.”

The CRM is well complimented by a centralised team of admin who drives 80% of the tasks within the CRM and the workflow. The broker only needs to worry about doing their 20% part in the process, and the rest is taken care of by the admin team. Simple things like sending things like email updates to the client is automated through the CRM and admin team.

There is a UMI calculator that compares all banks and lenders simultaneously.

Under the Nest model advisers have access to a mentoring scheme, and leads are generated through its website and social media platforms.

Kerwin says “leads that are handed over from the centralised unit in the past have a 47% settlement ratio.”

Franchise owners are also taught how to generate leads at a local level such as farming referral partners and live seminars.

Advisers write nearly half of all ANZ's loans

Advisers are getting close to writing 50% of ANZ's new loans.

The amount of business advisers send to ANZ continues to grow, but the bank's chief executive warns they are going to be harder to deal with.

ANZ said 46% of its new business in the 12 months to September 30 came from advisers. This is up from 42% the previous year and from 40% in 2019.

While it is a clear upward trend, chief executive Antonia Watson says she doesn't know if it will hit 50% next year, she told TMM.

Watson reiterated earlier comments that "the broker channel is really important to us".

She says mortgage advisers are a good source of information for customers who've got questions, and there are plenty of those as lending becomes more and more complex.

"We've got some tax changes and we get monetary policy changes and all sorts of things going on, interest rates are going up by the looks of things and certainly have a little bit already.

"We see that particularly in Auckland where it's even more complicated and it's harder to get into a home."

She says with changes like the CCCFA the bank will be harder to deal with.

"We get harder to deal with as some of these changes come in."

Added to that are requirements for 40% deposits, tax rate changes, and affordability assessments changing as interest rates rise.

Watson is not a fan of the impending CCCFA changes.

"It is going to make it a more onerous process for customers and for our staff to write a home loan because there's just so much more evidence of affordability of suitability that we have to ask for and retain."

She describes CCCFA as "unfortunate".

"The unfortunate thing is that we were already doing responsible lending. We just now have to do responsible lending with lot more onerous process around it."

While some non-banks think they will have an advantage with the changes, Watson is not so sure.

"The non-bank sector still has to comply with the triple CFA and in some ways that might make it harder for them because we've had to put a lot of resource into compliance and under setting of our systems and our control frameworks around them."

As for the bank's near $2 billion profit, she says "there's just no question that it's a big number".

While people may complain an Australian-owned bank is making such big profits, she says it needs to be put into context. She jokes that even she struggles sometimes calling it millions rather than billions.

"We've got $185 billion worth of assets and our shareholders invested $15 billion into New Zealand. So those are types of numbers that you don't see around other parts of corporate New Zealand.

"So that's where the big number aligns to, but I can't argue that it's a big number." ✚