HOW SME LENDING ENHANCES YOUR
come from; Plugging the knowledge gap with CPD, Banks tardy on clawback policies.
Group conference.
Reaction
Sally
WESTPAC SHOOTS ITSELF IN THE FOOT
As
we went to press Westpac confirmed it was taking the axe to trail commissions and removing them from next year.
And, contentiously, buy back trail books at two times commissions.
It would not be an understatement to say it has been handled poorly. Even to the stage where it has only held discussions with aggregation groups, not advisers – the very people who generate around two thirds of their home loans each year.
Feedback has been loud and clear. No one saw this coming (which is unusual in such a tight knit industry).
As one dealer group head says, advisers have been loud and noisy.
“Talk about pulling the rug from under our feet,” one adviser said to TMM.
Kudos to Financial Advice NZ and its CEO Forum, which is made up of representatives from the aggregation groups. They engaged with Westpac (rather than the other way around) and had some wins. Importantly, they came out with a strongly worded statement after the announcement heavily criticising Westpac.
In a business where the relationship between lenders and advisers is so critical, Westpac’s move is, being polite here, tone deaf.
There is a degree of arrogance
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Publisher Philip Macalister
Staff writer Sally Lindsay
Contributors
Paul Watkins, Steve Wright
Design Michelle Veysey
around the move. Advisers are very angry with how the bank has handled this, yet they are the biggest source of new loans to the bank every year.
I’ve always held the view that trail commissions are very important as they incentivise advisers to provide on-going service to clients – something the regulator is pretty focussed on.
Secondly, it allows mortgage advisers to build a more valuable business with on-going revenue streams, as opposed to one which relies on upfront commissions.
Having a financially sustainable advice business which has clients at the centre of everything is what regulators want.
It seems bizarre to move to a model which is centred around transactions.
Likewise, the global trend is towards trail commission models.
Westpac isn’t saying much about the consultations happening at present which is a shame as no-one really understands its thinking. Those who know a bit have essentially been gagged.
We understand there may be some commercial elements suggesting trail is more expensive to a bank than
upfronts, and that retention rates for loans paying trail commission are not as high as the bank would like.
There is no clear answer to the first one, but one knowledgeable source suggested trail is 10-20 basis points more expensive to a bank than the upfront model.
Retention is such an ironic argument, and essentially stupid, as the banks fight tooth and nail to win customers off each other with things like cashbacks. Their behaviour incentivises switching.
There is no doubt this change will mean a loss of business for Westpac, which again is ironic as it has recently had issues with pricing and other things which have hurt it.
As one adviser said: “It’s bloody stupid to f**k up your biggest distribution channel needlessly.”
Philip Macalister Publisher
Innovation with intention: Technology built for advisers
SÉBASTIEN PIERRE, GENERAL MANAGER, ADVICELINK
AdviceLink was built to support advisers in delivering great advice, right across the industry. Yet there’s still a common perception that it’s just an internal CRM tool for LFG and NZHL—our sister companies. That’s understandable, but it’s no longer accurate. We’re going wider. Each business using the platform has its own secure tenancy—LFG has “AdviceLink,” NZHL has “MyNZHL,” and the new adviser business we’re onboarding will have its own version, tailored to their unique processes. Client data remains securely contained within each tenancy, ensuring privacy and independence.
After nine months in the financial advice sector, one thing has become clear to me: advisers are very open to innovation. Not because they’re chasing the latest tech trends, but because they’re deeply aware of the friction in their day-to-day work— and they want it gone, so they can spend more time providing value to their clients.
This market is remarkably responsive to new technology. Advisers recognise the potential in tools like AI and are eager to explore how these can enhance workflows and improve client outcomes. We’re in a time of energetic innovation, with a strong appetite for smarter, more integrated platforms. Advisers want more than just application or compliance management—they want tools that enhance the client experience and help customers better understand their financial position, enabling them to make informed decisions, particularly around affordability, and create a plan to achieve their financial and life goals. AI has lowered the barriers to building helpful tools. Previously,
ABOUT ADVICELINK
creating software for advisers needed deep technical and industry expertise. Now, easier access is shifting adoption—but it must be approached with care. Technology should support advisers, not replace them. At AdviceLink, our role is clear: we help advisers stay focused on their clients and relationships. Advice should remain a human experience.
Our mission is simple: help advisers stay compliant, worry-free, and focused on the clients. AdviceLink includes built-in guardrails, allowing advisers to focus on providing excellent advice. With increased evidence and audit demands, simplicity is essential. AdviceLink was built to address this pain point.
But we’re not just solving for today— we’re thinking ahead. Our goal is to stay a couple of steps ahead of the adviser, anticipating what they’ll need next and delivering it at the right time, in the right place. That comes through well-designed workflows, smart integrations, and AI-powered features that synthesise information and reduce noise.
AdviceLink reflects real-world adviser needs with built-in compliance
workflows. The interface is intuitive and stress-free—exactly the kind of reliability advisers need in today’s environment.
For adviser businesses or FAPs managing multiple advisers, the challenge is consistency—especially when acquiring businesses, each with its own systems and workflows. AdviceLink offers unmatched configurability, allowing these businesses to tailor the platform to their specific needs. It’s not just a CRM; it’s a strategic asset.
NZHL is a great example. They chose AdviceLink because it could be configured to match their bespoke processes, honed over 30 years. It’s now a tool that delivers their unique client experience, not just a system for record-keeping. This flexibility is especially important for businesses that want to maintain their identity and operational style while scaling.
If you’re an adviser frustrated with your CRM, you’re not alone. Many tools are either too rigid or so flexible they lack consistency—making it hard to run your business efficiently. AdviceLink strikes the right balance: a platform that adapts to your workflow while maintaining structure and reliability. It’s designed to support how you work, without the complexity that often comes with other systems.
For business owners and decisionmakers, it’s about having control. You get the traction of a platform used by hundreds of advisers, plus the ability to configure it to your business. It’s a strategic asset that grows with you.
If you’re ready to explore a CRM that supports your advice process and grows with your business, get in touch. We’d love to show you what AdviceLink can do. ✚
AdviceLink is a market-leading CRM platform purpose-built for New Zealand financial advisers. Designed to streamline the advice process and simplify compliance, it offers seamless workflows, smart integrations, and unmatched configurability. Backed by a Government-owned parent company (Kiwi Group Capital), AdviceLink is trusted by hundreds of advisers to deliver a reliable, intuitive, and future-ready solution.
SÉBASTIEN PIERRE
The mortgage advice industry is quietly pulling in talent from all corners of the workforce.
Recent figures tracking 26 new advisers show the biggest group - 13 people - came from administration roles in financial services. But the rest are coming in from everywhere: construction workers, hospitality staff, beauty professionals, IT specialists, a real estate agent, retail workers, a tradie, someone from travel and rideshare, and even a utility provider employee.
Since February 2024, 200 advisers have gone through NZFSG’s MyInduction programme. Most are genuinely new to the industry rather than switching between groups.
Looking at the most recent quarter:
Fresh faces in NZ's mortgage adviser pipeline Banks tardy on clawback policy changes
ANZ has dropped its maximum clawback period for adviser commissions from 27 months to two years, with clawbacks now diminishing on a pro-rata basis every 30 days.
Other banks have done nothing, and one adviser says they continue making excuses that they're reviewing their respective clawback policies.
"This continued delay feels increasingly like a slap in the face to the mortgage adviser industry which help lenders like the ASB grow their mortgage book annually," the adviser says. "Sadly, the ASB doesn't appear to value the business it receives from the adviser channel given its obvious lack of urgency in reducing existing adviser clawback periods."
This is despite the Commerce Commission saying in April it was pleased with banks' progress on shifting to a monthly pro-rata clawback model. Commission chairwoman Anne
35% of new advisers previously worked in administration roles within financial services, while 30% have lending or insurance experience. Another 11% arrive with no relevant experience at all, 8% have less than two years as an adviser, and 16% bring more than two years of experience.
The age spread is also interesting. Among new-to-network entrants, 60% are between 30 and 45, while 30% fall into the 45-60 bracket. Only 8% are under 30, and just 2% are over 60. It's clearly attracting people looking for mid-career changes rather than fresh graduates.
Zane Low, a relationship manager who works with new advisers, says the biggest hurdle is building a client pipeline and generating new business.
"It's easy to say 'talk to your friends and family', but as we know, that's a
finite resource," Low says. "A more realistic approach is to help them understand that their first year will likely involve less than 10 settlements. This means we need to have a clear plan in place for how they will manage their cash flow during this initial period."
Low recommends having six to 12 months' worth of living expenses saved before making the switch. This takes the pressure off chasing immediate commissions and gives new advisers room to learn the business properly.
As for building that client pipeline, Low says professional referral networks with real estate agents, accountants, and lawyers is the best path. Local networking events still matter, but LinkedIn and other social media platforms are increasingly important.
Callinan said one of its focuses was on clawbacks, particularly how they may influence switching behaviour.
"We appreciate that some clawback is justified where a customer leaves in the very early term of a mortgage," Callinan said. "But we recommend that clawback of commissions are prorated, reduced monthly, and there should be no clawback of commissions after two years."
Squirrel Mortgages chief executive David Cunningham says policies at all banks differ and it's a problem. Some banks apply rules such as 100% clawback within six months; 75% clawback seven-12 months; 50% clawback 13-18 months; 25% clawback 19-24 months. "This step approach many banks still apply has elements of unfairness. It's more the smooth (rather than stepped) pro-rata clawback that should be implemented," Cunningham says.
The commission says the existing lengthy clawback periods are an anti-competitive practice that deters borrowers from refinancing.
The longer clawback periods also place mortgage advisers at risk, as they can be forced to repay commissions when clients switch lenders or refinance, even when it's in the client's best interest to do so.
Financial Services Complaints said it receives about 12 to 15 complaints a year about mortgage advisers seeking to recover clawed back commission.
Plugging the knowledge gap with CPD
There's no magic number when it comes to CPD for financial advisers.
The FMA doesn't set a specific CPD point requirement, instead saying advisers must maintain their competence through learning activities relevant to their practice and the regulatory framework.
The new Financial Advice Code, taking effect on November 1, tweaks the CPD rules by asking advisers to plan and record relevant learningbut it remains non-prescriptive with no hard minimums. It also recognises "informal" learning.
The Financial Advice and Mortgage Brokers Association of New Zealand (FAMNZ) says mandatory ongoing CPD is critical for mortgage advisers to stay informed as the industry evolves.
FAMNZ managing director Peter White says his concern isn't that advisers lack knowledge - it's that their knowledge isn't evolving as the industry and rules change. "It's exceptionally important advisers keep up professional development hours and unless it is mandated people can
be a little bit lax on that," White says.
Under existing rules, each FAP decides what's reasonable for their advisers. For advisers themselves, it's about making sure the CPD they complete is actually relevant and useful.
Some advisers are pushing back hard on the idea of mandating CPD minimums. One commenter said forcing the FMA to implement mandatory CPD points would be detrimental to the financial advice industry, which deals with such a varied range of advice.
"Training is not a one size fits all with advisers across the investment, insurance and mortgage," they said.
"Dictating a compulsory CPD structure will only strengthen the profit line of dealer groups and training providers that already have a hierarchy or monopoly over advisers, especially in the mortgage space."
Another comment stated: "When I read about aggregators and associations talking about mandating CPD for mortgage advisers, I keep hearing the song 'For the Love of Money' by The O'Jays."
Commenters note that for mortgage advisers, professional development largely focuses on product knowledge with the various providers they deal with. Much of this information is already provided by lenders for free, as they regularly communicate with advisers on changes and enhancements to their policies and products.
"Evidence that you are abreast of these announcements made by the providers as they happen can be easily shown in a register," one adviser said. "I can't think of a better or more appropriate way to demonstrate ongoing professional development as an adviser, and it's costing you nothing but time.” ✚
PETER WHITE
An advice community that punches above its weight!
A new version of the same great business
Stronger together: why mortgage advisers thrive in Newpark
In today’s fast-evolving financial landscape, mortgage advisers face increasing pressure to deliver exceptional service, stay compliant, and grow sustainably. The good news? You don’t have to do it alone.
Newpark isn’t just about access to lenders, it’s about becoming part of a community that empowers you to thrive.
A community that has your back
Imagine being part of a network where collaboration replaces competition. With a culture of support and shared learning. Whether you’re a solo adviser or part of a growing team, you’ll benefit from peer connections, mentorship, and a sense of belonging. Our vision for Newpark is backed by a strong sense of what’s good for our adviser community.
The Newpark academy. Education that elevates
Our Newpark Academy helps you stay ahead with ongoing professional development:
• CPD-accredited workshops throughout the year
• Masterclasses and webinars
• One-on-one mentoring
• On-demand resources
Our programs are designed to sharpen your skills, deepen your knowledge, and keep you compliant in a changing regulatory environment.
Compliance & quality assurance
Navigating regulation can be daunting. Newpark provide built-in compliance tools, audit support, and expert guidance, so you can focus on your clients, not audit preparation. With robust systems and oversight, you’ll
operate with confidence and integrity. Chose to be your own FAP or come under the assurance of the Newpark FAP.
Grow your business with confidence
From our MyDash platform to marketing support, Newpark offers the infrastructure to scale your business. You’ll gain access to:
• A wide panel of lenders
• Seamless application systems
• Strategic business advice
• Commission models that suit your goals
Whether you’re just starting out or ready to expand, the right group helps you grow smarter and faster.
Why advisers choose to join Newpark
By joining Newpark, you’ll not only become part of one of the most successful advice communities in New Zealand, you’ll have full access to:
• Community that connects
• Compliance that protects
• Technology that simplifies
• Education that empowers
Stronger together
Joining Newpark isn’t just a business decision, it’s a strategic move towards excellence. When you’re backed by a network that believes in your success, the possibilities are endless.
Ready to grow with us?
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We know the challenges that come with running a business, and a licensed FAP is a big one.
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The Newpark Academy is here to get you up and running and to help you thrive and grow. Feeling on your own or alone? At Newpark home loans we believe we’re stronger together.
Community that connects
Be part of a family, not out there on your own. We’re in it together.
Compliance that protects Newpark supports its advisers when they need it. Do right by us and your customer, we’ll do right by you.
Technology
that simplifies
Our MyDash technology is a trail blazer in advice software. Simplify your business with MyDash.
Education that empowers
LFG Conference 2025: Where Strategy Meets Success
Link Financial Group (LFG) has successfully delivered its largest and most impactful conference to date, bringing together over 200 professionals—including advisers, lenders, insurers, and referral partners—for three dynamic days of learning, collaboration, and innovation at the QT Gold Coast.
Under the theme “Ready, Get Set, Growth,” the event showcased LFG’s commitment to scaling adviser businesses and embracing technology-driven transformation in financial services.
Attendees gained valuable insights from keynote speakers. Marty Wilson challenged the audience to embrace uncertainty as a driver of innovation. Luke Kemeys from Keep the Change highlighted the critical role advisers play in improving financial literacy
across New Zealand. Jarrod Kerr, Chief Economist at Kiwibank, delivered a timely economic update.
A series of major announcements underscored LFG’s momentum and future focus. The group launched its strategic partnership with Success and Adviser, a platform designed to help advisers scale smarter.
It also unveiled its enterprise partnership with Afterburner, the New Zealand-founded marketleading automation platform designed by advisers for advisers, setting a new benchmark in productivity, compliance, and client experience across the financial advice industry. The Afterburner partnership is about empowering advisers to spend more time with clients and less time on tasks like writing mortgage recommendations (once
conversations have been had with clients), completing handover forms, running bank borrowing calculations, and documenting compliance notes. Work that previously consumed 10 to 15 minutes per task now takes seconds.
Further demonstrating its commitment to streamlining adviser workflows, LFG announced the integration of Hailo’s 5-minute home loan application, powered by loanoptions.ai. This innovation simplifies the application process, improving both adviser efficiency and customer outcomes.
These innovations were underpinned by a strong FY25 performance. LFG marked a milestone year for loan settlements and new API insurance written. Adviser growth exceeded 20%, and the business continued to enhance its compliance frameworks and
PHOTOS:
Team Everbright
Josh Bronkhorst & Luke Roberts
Team Cole Murray
engagement initiatives— reinforcing its reputation for operational excellence.
The upcoming launch of LFG
Connect in September marks another milestone. The internal communication platform will offer real-time updates, CPD tracking, training modules, and access to policies for Authorised Bodies—reflecting LFG’s ongoing investment in digital infrastructure and adviser enablement.
Also announced were new partnerships that broaden its offering and expand its network of service providers across both lending and insurance. In addition, it significantly grew its referral network—introducing a range of new referrers to help advisers increase revenue and support clients in more meaningful ways, strengthening their position in an increasingly competitive market.
LFG was thrilled to celebrate
outstanding contributions across the adviser network at this year’s conference. Big congratulations to Francine Kwok (CEO’s Award), Mortgage & Insurance Link Otago and EverBright Finance (Top Offices), Richie Wallace, and Wanita Tautua (New Advisers of the Year), Loma Robertson (Top Support Person), and Sam Khatri (Top Insurance Specialist).
Alongside the acknowledgment of Josh Bronkhorst’s 10-year leadership at LFG. In his speech, Bronkhorst credited the group’s success to the advisers and providers, stating:
“Without the amazing advisers and providers gathered here, I wouldn’t be in a fortunate position to lead such an amazing LFG team and group of advisers helping Kiwis achieve their financial dreams.”
One thing that remained clear throughout the conference is that LFG
remains focused on delivering value to advisers through innovation, strategic partnerships, and industry leadership.
If you’re looking thinking about how to take your adviser business to the next level reach out to support@lfg. co.nz to find out what it means to be part of the LFG adviser network. ✚
About LFG
commitment to empowering financial advisers through knowledge, skill, and compliancefocused support has solidified its position as one of New Zealand's most enduring and successful financial aggregators.
Content supplied by LFG
PHOTOS: 5. Afterburner and LFG (Geoff Christopher, Luke Roberts, Josh Bronkhorst, Jacob Munoz, Naylon Cassidy, Kip Hanna) 6. LFG and Afterburner and Rob Smith on the end
(NZHL Board) 7. MC Doug Kamo 8. Awards Dinner
People on the move
Reaction to appointment of new RBNZ governor
Anna Breman, the Reserve Bank’s new governor from December, comes with impeccable credentials on monetary policy.
But she lacks experience on prudential regulation, which has become a much larger part of RBNZ’s functions.
It was for that reason that former RBNZ official Michael Reddell called her appointment “a risky call,” and Reddell also said that Breman lacks an “instinctive understanding of the New Zealand economy and its challenges."
However, former RBNZ governor Don Brash welcomed her appointment, praising her credentials, and said he expects her to bring greater transparency to RBNZ, although he doesn’t think actual monetary policy will change under her stewardship.
“The framework is clearly established [and] the priority for getting inflation under control is also clearly established, so I don't expect any radical change in policy from her," Brash said.
Brash himself, when governor, had paid scant attention to prudential regulation – arguably, getting inflation down from its double-digit levels when he took office in 1988 was a much more urgent task.
Breman, 49 and currently serving as the First Deputy Governor of the Sveriges Riksbank, the central bank
of Sweden, has studied at Uppsala University, the Stockholm School of Economics, Harvard University and the University of California, San Diego. She was chosen from about 300 applicants and instead of current acting governor Christian Hawksby, who had publicly said he had applied for the permanent position. Hawksby, who was previously deputy governor, will now leave RBNZ once he has assisted Breman’s “smooth transition.”
ANZ chief economist Sharon Zollner noted that Breman will have until February 18 next year before delivering her first monetary policy statement.
“We wouldn’t expect any impact on monetary policy decisions in the near term,” Zollner said, but noted that there could be changes to how the monetary policy committee’s (MPC’s)
One FMT BDM moves on…
FMT business development manager
Geoff Allen is leaving after four and a half years in the role.
He is starting a new chapter with Lendr in October.
“The new role feels like the perfect next challenge,” he says on LinkedIn.
“I really enjoyed working alongside talented colleagues and contributing to a fantastic business.”
Lendr specialises in fast, flexible non-bank residential mortgages for developers, builders and investors. These loans include residual stock
funding - a loan solution that helps transition a recently completed property development away from construction finance.
“Unsold units at the end of a development can tie up capital and slow your next move. Residual stock finance lets you release that equity—boosting cash flow, reducing pressure, and helping you fund your next project.”
Lendr also offers investment property financing.
FMT is looking to replace Allen.
minutes are put together because, unlike in New Zealand, the votes at Riksbank's MPC are attributed to individual members.
Zollner noted that the Riksbank and RBNZ “are buddies from way back” and that it was a Swedish academic economist, Lars Svensson, who was an early proponent of inflation targeting with RBNZ being the first central bank to adopt this as a policy, which is now commonplace globally.
Westpac chief economist Kelly Eckhold is also hoping Breman will have an increased focus on transparency.
“We would expect the new governor to push for publicised votes, public discussions from each MPC member on their vote and the rationale for their position, along with press conferences being held after every meeting,” Eckhold said.
“I also anticipate a focus on lifting the volume and quality of speeches made by MPC members on the economic outlook and policy considerations.”
BNZ economist Doug Steel noted Breman’s comment that “RBNZ will be laser-focused on low, stable inflation” under her leadership.
“It all sounded very orthodox. We see no clear implications for the broad direction of monetary policy.”
ANNA BREMAN
…’ello
‘ello there’s a new FMT BDM in Chch
Meanwhile FMT has new BDM in Christchurch who has been an adviser, worked for a bank and been a detective constable with NZ Police.
The non-bank lender has appointed Natalie East as business development manager in the Christchurch office.
Phil Bennett, head of lending at FMT said, “Her expertise will be invaluable as we tap into the strong growth across Christchurch and Canterbury, where investment and development are making this one of New Zealand’s most dynamic regions”.
East brings not only a wealth of experience in banking and finance: spanning mortgage advising, lending, and portfolio management, but also a strong reputation for building trusted relationships and delivering results.
“Natalie’s background in both the main banks and as a mortgage adviser positions her perfectly for this role.
With so much investment flowing into Canterbury and Christchurch, and with FMT already working on key projects that are delivering real growth and prosperity for the city, her insights and relationships will be invaluable for our borrowers.” he says.
East was been a mortgage adviser with Loan Market this year and prior to that spent nearly eight years in various roles with BNZ. She was a detective constable at the Police before joining financial services.
In her new role, East will focus on strengthening FMT’s presence in the region, fostering new relationships, and supporting mortgage advisers to better understand the value specialist lenders can provide.
East says, she is excited to play a role in the growth story unfolding in Canterbury.
“Having worked on both sides, as a mortgage adviser and within
mainstream banks, I understand the pressures advisers face and how specialist lenders like FMT can deliver real value. I look forward to working with advisers and contributing to the projects that are helping shape a prosperous future for Christchurch and the wider region.” ✚
NATALIE EAST
Busting the housing shortage myth
BY SALLY LINDSAY
A housing economist says there is no housing shortage.
Research by Wasay Majid, who holds a PhD in Property from Auckland University and specialises in housing markets, affordability and the intersection between housing and monetary policy, says the shortage may be an urban myth and simply the product of faulty assumptions.
He says the issue is not supply.
Instead, a technical concept known as the replacement rate (RR), or demolition/depreciation rate (each bank uses a separate word for this), has quietly distorted the understanding of housing need.
“This framing has a massive impact. It inflates demand figures and creates a large shortfall on paper,” says Majid.
When tested against real numbers, the story changes completely, he says.
The replacement rate is a theoretical estimate of how much housing stock needs to be rebuilt each year to maintain long-term supply.
Majid says it does not reflect the functional housing stock, nor the level of housing services that stock provides.
Data collection halted
Historically, Statistics New Zealand collected annual demolition data from 1969 to 1986, but discontinued it nearly four decades ago.
In its absence, experts default to legacy estimates of demolition rates (not counts).
David Burtt’s 0.4% (1979–1989), from the National Housing Commission, has become the go-to assumption.
This hypothetical replacement or demolition rate drives analysis across major institutions – banks, the Reserve Bank of New Zealand (RBNZ), the New Zealand Institute of Economic Research (NZIER), and the Government.
Majid says the problem is that the demolitions are hypothetical, treated as vanished homes and framed as new (replacement) demand adding pressure on the housing system.
“The result is a modelling fiction sold as fact,” he says.
Theory to the test
To test the theory, Majid built three housing supply-demand mismatch models covering 2001 to 2024.
The first uses census data where actual dwelling counts are housing supply and population totals as demand, assuming 2.7 people per household. This shows a surplus of 35,389 homes.
The second mirrors the method used by banks and policy advisers.
It uses the hypothesised replacement rate of 0.4% for demolitions, new completed consents (93% of consents) as supply, and population-based demand where household size is 2.7.
This model shows a growing shortage since 2001, peaking at 121,000 homes in 2020 before dropping to 73,623 in 2024.
The third uses an ‘estimated’ RR of 0.1%, based on the residual method, which uses consent completions and census dwelling growth. The model shows a surplus of nearly 49,000 homes.
One assumption thus flips the narrative.
The 0.4% rate shows a crisis. The 0.1% rate shows a surplus.
Even basic mathematics breaks the myth, Majid says.
“We built 601,000 new homes between 2001 and 2024 which is enough to house 1.6 million people. Our population grew by only 1.4 million over this period.”
Majid extended the model back to 1967, using the same 0.4% demolition rate. The result? No long-run shortage. Despite a deficit of around 13,000 homes at the base year, supply caught up. By 2024, there was a surplus of more than 116,500 houses.
Political spin
He says the ‘housing shortage’ story is not accidental; it protects powerful interests.
“Politicians promise ‘record-breaking builds’ while dodging real reforms like vacancy taxes or zoning changes.”
Banks and developers use the fear of scarcity to push higher prices and bigger mortgages. If the shortage is exaggerated, policy is built on fiction, Majid says.
“More homes alone will not solve this.
“We must tackle speculation, credit policies and tax breaks that reward investors. Until then, supply will never meet affordability.
“We should track demolitions again, tax empty homes (Vancouver cut theirs by 25% with a simple levy), and deal with artificial scarcity via upzoning, ditch urban boundaries, and let builders build where demand exists.”
House values lift wealth
BY SALLY LINDSAY
Households are 33% richer than they were in 2021, thanks to a lift in the value of real estate.
Statistics New Zealand’s latest household net-worth data, for the three years to June 2024, shows the median net worth of households reached $529,000, compared to $399,000 in June 2021.
This is calculated by taking the value of household assets such as housing, retirement savings and other investments, and subtracting debt. Owner-occupied homes and other real estate (not including those owned through trusts or businesses)
accounted for 48% of total household assets in the year ended June 2024 – up from 43% in the year June 2021 year.
However, after house prices boomed post-Covid, they have been steadily declining since.
New Zealand's wealthiest 20% of households had their wealth increase by 24% to a median $2.4 million. They hold their wealth mainly in financial assets such as pension funds, shares, and investment funds.
The median net worth of households in the two quintiles below the top increased by 40% to $500,000 and $1 million, respectively. Most of their wealth is held in non-financial assets such as real estate and durable goods.
Top heavy
In the year ended June 2024, the wealthiest 20% of households held approximately two-thirds of New
Zealand's total household net worth.
Individual net worth increased with age. Those aged 15 to 24 had the lowest median, at $4,000. People aged 75 and over had the highest median, at $590,000.
The top 1% now hold 14.1% percent, which was slightly down on previous years.
The wealthiest 10% of households hold 49% of the country’s total household net worth, compared with 53% in the year ended June 2015.
Westpac senior economist Satish Ranchhod says it is interesting that the upper quintile had more of their wealth in assets outside real estate.
"Even as we've moved beyond the statistics of 2024, the lower interest rates we've had over the past year will certainly be adding to that wealth portfolio for a lot of them."
Big-ticket homes for foreigners thin on the ground
Expensive properties foreigners can buy under the Government’s relaxation of the Golden Visa rules are in short supply.
Foreigners with the officially known Active Investor Plus Residency Visa are allowed to buy or build one home in the $5 million-plus price range, but there are only about 7,000 homes across the country in that category.
Cotality chief property economist Kelvin Davidson says $5 million-plus homes make up only about 0.4-0.5% of all dwellings.
In Auckland, there are 4,300, or about 0.8% of all properties. There are another 1,250 in Queenstown, about 5.5% of that market.
"It's a more notable share of the Queenstown market, but even in Auckland it's fairly small," Davidson says.
"Together, [that] only leaves about 1,500 [properties] across the country everywhere else."
Additionally, he says while there might be 7,000 properties in that range nationwide, they have to be for sale. And in any given year there might be only 5% actually listed - about 300-400. It is a limited pool from which to choose. And, like local buyers, foreigners do not want to overpay.
Sotheby’s managing director Mark Harris says given the state of the economy, the country needs as much productive investment as it can get.
“By allowing foreigners on the active investor visa to own a home here, it encourages them to invest in other business ventures in New Zealand, which then leads to capital expenditure and job creation.
“Before the 2018 ban, there were many foreign homeowners here who contributed greatly to the community with business investment.”
Harris says allowing foreign buyers into the country while introducing a value hurdle protects the domestic buyer and limits the number of investors who can purchase.
“In recent years, Australia has benefitted from the investors New Zealand has turned away,” Harris says. ✚
Landlords under pressure to reduce rents in major cities
A glut of vacant rentals in Auckland and Wellington has shifted the dynamic between landlords and renters.
BY SALLY LINDSAY
In the capital, some tenants have been able to get landlords to agree to knock close to $100 off their weekly rent.
Landlords are also offering all kinds of incentives to get prospective renters to viewings.
Property experts say it's a stark contrast to a couple of years ago, when the market was a "little bit crazy the other way," with rents rising every year.
Auckland-based Barfoot & Thompson, the city’s biggest real estate agency which manages more than 17,500 properties in the region, had 1,500 fewer enquiries about available listings in September compared to August, down 6.4%, leading to fewer groups viewing properties, down 4.8%, and fewer applications, down 4.1%.
Compared to averages over the previous three months, enquiries were down 5.5%, and groups shown through rentals down 3.4%, while applications were up slightly, by 1.3%.
A total of 593 properties were rented in September, 4.8% below the three-month average; and the agency ended the month with 830 properties available for rent, 2.2% more than the same time last year.
Barfoot & Thompson Property
Management general manager Anil Anna says the consistently lower levels of renter activity over the past year has created a highly competitive environment for landlords, prompting many to hold and, in some cases reduce, rents to retain existing tenants or attract new ones.
“With so much choice available, and fewer people looking, property owners are under pressure to be more competitive on price and presentation.
At the end of September, the average weekly rent across Barfoot & Thompson’s rental portfolio was $695.23, up just 89 cents, or 0.1%, from August, and just $9.76, or 1.4% higher than a year ago.
Around the region, Rodney-based properties had the greatest percentage increase in average rent, at 2.9%, while central city-based apartment rents were down 2% on average. By size, three-bedroom homes had the greatest percentage increase in rents, ending the month at an average just shy of $700 per week.
“Interested tenants are making cautious and considered decisions about their next move, and price is a major factor in the existing economic environment,” Anna says.
Listings “extremely high”
In Wellington August data from Trade Me shows average weekly rents declined sharply through a significant increase in listings and a drop in demand.
This resulted in Wellington rents dropping more than 11% compared to the previous year. It was the biggest year-on-year percentage drop in average rent across the country.
The median weekly rent sits at $595. Rents for three to four bedroom houses and one to two bedroom homes fell 7.4% and 9.5%. However, rents for homes with five or more bedrooms shot up by nearly 19% to $1,100 a week.
Wellington-based Property Investors Federation president Peter Ambrose says the recent number of vacant rentals in the capital, is the highest he has seen in a decade.
The Wellington market usually hovered around 500-1,000 vacancies according to Trade Me listings, but in June it peaked at more than 1,700 - a conservative snapshot, as it didn't account for rooms advertised on social media.
In early October there were just under 1,400 listings which is still
"extremely high”, Ambrose says. He attributes it to job losses in the public and private sector, as well as lower numbers of university students in the capital.
"There is a lot of choice out there. Some landlords have had vacancies just about all year on some of their properties. I personally know people who haven't been able to tenant the place for a few months, so they're taking it off the market and looking to do a complete renovation."
He says the real issue is getting people to viewings. Landlords were now offering a range of incentives, such as free weeks rent, whiteware, and paying for internet and moving costs, to entice people through the door.
High stock levels bringing prices down
“It’s a market of choice for renters, Vanessa Williams, realestate.co.nz spokeswoman says.
The real estate web portal’s data shows listings are up 18% year-on-year.
The total number of rentals across the country has risen from 6,555 properties to 8,224 properties – up 23.6% on September last year.
The average rental price across the country fell 3.1% in September to $624 per week. A year ago it was sitting at $644 a week.
Williams says rental property owners and investors have held onto their properties “keeping them in the general rental pool for longer, driving stock levels up and bringing prices down”.
“This has given tenants greater negotiating power and the opportunity to add to their savings or first home deposit with money that would have previously gone to rent.”
Despite the general fall in rent across the country, the central North Island bucked the trend, and was up 10.4% from a year ago.
Average rents in the region are now $602 a week compared to $545 a year ago.
Nelson and Bays and Waikato also had increases, up to $590 and $575
respectively, compared with $560 and $556 last year.
Williams said this was a reminder New Zealand’s rental market isn’t moving in one direction.
“Factors like regional growth, employment opportunities, and lifestyle appeal are keeping rents buoyant in certain areas, even as they ease elsewhere.”
‘Factors like regional growth, employment opportunities, and lifestyle appeal are keeping rents buoyant in certain areas, even as they ease elsewhere’
Vanessa Williams
Not surprising
Independent economist Tony Alexander says the fall in rents in some parts of the country shouldn’t be too surprising for a couple of reasons.
First, house prices nationwide have fallen over five of the past six months. There are plenty of sellers, but not as many buyers, with the supply situation partly reflecting the spike in new builds immediately following the pandemic, particularly in Auckland, he says.
“Those unsold townhouses will eventually find owners, but perhaps not this year.”
Writing in the NZ Herald he says second, population growth is slowing, with annual net migration, dropping from a peak of 135,000 in October 2023 to just 13,000 in July this year.
Alexander’s monthly surveys of residential property investors have
shown weakness in the tenancy market for some time.
In April last year 25% of landlords said getting a good tenant was easy. Three months later, 12% said it was hard. In November, the reading was -21% and it reached a record of -41% in July and August of this year. The latest reading is -36%, which can be interpreted as things not getting worse rather than an improving trend, he says.
Interestingly, he says it has taken more than a year for this turn in tenant availability to manifest itself in falling rents.
“Having said that, weakness in the rental market became evident in early 2024. Near the end of 2023, landlords were looking to raise rents by 6% over the next 12 months. By mid-last year, they had scaled back their ambitions to a rent hike of 4.5% and the latest reading is 3.9%.”
Are the weaknesses in the rental market putting people off buying investment property?
Alexander says for existing investors, the answer is only slightly. In the last three months of 2023, 21% of existing investors said they wanted to buy again in the coming year, now just 19% want to buy again.
His recent surveys of real estate agents found only 14% had noticed more investors in the market. While that is down from 22% at the end of 2023, the number is still positive. “Investors have not deserted the market,” he says.
When he asks agents if they are seeing more investors wanting to sell, almost 24% say yes, compared with 11% in late 2023.
“More investors looking to sell their property or properties is one of the factors making the market positive for first home buyers.
“They have plenty of new and used townhouses to choose from, plus plenty of older stand-alone houses, perhaps held by investors for a number of years.” ✚
How smallbusiness lending can enhance your advice business
Largely ignored by the big banks, small businesses remain a golden opportunity in the advice world. Sally Lindsay talks to four non-bank lenders about how they’re welcoming small and medium-sized enterprises (SMEs) through advisers.
Small businesses play an outsized role in New Zealand’s economy, yet are largely ignored by the main banks.
Loosely defined as those with less than 20 employees, there are about 594,000 small companies throughout the country, representing 97% of all businesses, accounting for 27% of employment and contributing more than 40% of economic value-add.
Mortgage advisers are being encouraged by specialist small-business lenders to add this lending to their portfolio - as a way to diversify income, enhance client relationships, capture new business and become a go-to financial partner for clients’ entire business needs.
Lenders say offering small-business lending services helps put mortgage advisers on the path to becoming a more comprehensive adviser.
By offering business lending, mortgage advisers can provide holistic financial support to their clients, addressing needs that extend beyond personal finance and strengthening the clientadviser relationship.
Small business lending can also attract new clients who need it and referrals could come from other professionals, such as accountants and lawyers, who recognise the need for specialised business-finance support.
Lending stops for some
It hasn’t been all rosy in the sector in
the past couple of years.
Last year, Australia-based Bluestone and Resimac pulled out, and the previous year HSBC also stopped its second-tier lending.
New Zealand-based and operated Line Capital managing director Sam Coleman says while rumours are always circulating about new players coming into the market, particularly from Australia, New Zealand is a completely different market with a much smaller population.
“There's a cost versus benefit view here. While the barriers to entry are low, it's about understanding the landscape,” says Coleman.
“To be able to get the right growth out of the New Zealand market and make it sustainable is probably a big ask.”
“To make it work, a new player would need to have feet on the ground and understand the credit dynamics.
“I don’t think a lot of them comprehend that unless they can find the right person here they can sit down with, and that person says, ‘I am going to lead the business’, they are setting themselves up for failure.”
Tough to get bank loans
Despite their economic clout, small businesses are finding it tougher to get bank loans, leaving some struggling to manage cash flow.
According to Reserve Bank data, the compound annual growth rate of bank lending to businesses has slowed from
6% in 2013 to just 1.5% today.
Business lending from ANZ has declined, while Westpac’s SME lending has remained flat since 2020. BNZ holds the largest business lending book, having overtaken ANZ in volume.
With banks increasingly favouring capital-efficient home loans over commercial credit, many small business owners are left with fewer funding options, although BNZ recently launched the Merchant Flexi Loan, a new unsecured product for small businesses using card sales data from the past 12 months, not traditional financials, and offering flexible repayment from 10-30% of daily card sales, which is automatically deducted, to rival non-bank lenders.
Coleman says small businesses need reliable lending to fund dayto-day operations, invest in growth opportunities - such as expansion and new equipment - manage cash flow effectively, build capability, conduct research and development, and adopt new technologies, which are vital for productivity.
Optimism and resilience
Small businesses aren't losing hope, however.
In fact, the latest research paints a picture of resilience and renewed ambition.
Non-bank lender Prospa’s SME Sentiment Tracker revealed 63% of Kiwi small business owners feel optimistic
about their growth, and 57% rate their current business health as “good” or “very good”.
The latest 2degrees Shaping Business Study reports New Zealand’s highest level of business optimism since 2021, with 45% of business leaders more upbeat about this year compared to last, and 65% expecting revenue growth in the year ahead.
However, this optimism exists alongside real financial pressure, particularly when it comes to managing cashflow.
The SME Sentiment Tracker found 59% of small businesses have just three months or less in cash reserves, and nearly a quarter have less than a month’s reserves.
The reality is that SMEs face an issue. They’re often the most dynamic, adaptable, and growth-oriented businesses but because they don’t fit traditional lending moulds they get left behind.
But as the major banks pull back on SME lending, non-bank lenders have been picking up the slack - and their businesses have been reaping the rewards.
Line Capital
Buying Zip Business Capital’s “mature” loan book two years ago put newlyformed Line Capital on a growth surge –40% year-on-year in the past 12 months.
However, managing director Sam Coleman says it has been lumpy and inconsistent in terms of lead flow and quality.
“There have been some definite underlying challenges, but there are still good opportunities from a lender's perspective and some positive business confidence stories,” says Coleman, who is also one of the company’s founders.
A typical Line Capital client has been in business for five years, has about a $2 million turnover and is looking to borrow about $100,000.
That doesn’t mean the New Zealandowned and operated company doesn’t lend to companies that have been in business for just 12 months, have a $100,000 turnover and want to borrow $10,000 or multi-entity firms with multi-million dollar turnovers.
“We are serving a large number of companies with different purposes for funding requirements from trade finance, invoice finance, working capital, unexpected costs, refinancing and even growth funding,” Coleman says.
“We have a well-diversified portfolio when it comes to industry and the typical use case for our funding is
certainly working capital, but we definitely cater for many different purposes.”
Working in the non-bank lending sector for 15 years, Coleman says there has been a big shift by small businesses to lending from second-tier finance companies in the past seven years, giving traditional banks a “wake up call” in terms of what products are in the market and their suitability in terms of funding.
“For instance, non-bank lenders have been faster in adopting new technology and tools that allow them to understand the underlying risk better.
“If we can become more productive on the use of this capital within those businesses, then effectively we're growing the country’s gross domestic product (GDP),” he says.
“And whether or not non-bank lenders are being used as a stepping stone for a business to ultimately achieve better
‘We like dealing with advisers. We see them as the frontman’
Sam Coleman
traditional financing, or if it's actually a core part of their funding regime, I think it is part of why we've seen growth in non-bank business lending.”
AI helpful within limits
Line Capital sees AI playing a bigger part in its business, but only around data analytics, predictability scores and digging into its own data sets more.
The company is working on a few AI projects, but, given it has more of a commercial approach to its assessment of borrowers, Coleman doesn’t think AI will be particularly helpful with understanding narrative and the adviser and client notes around a company’s specific structure.
He says many businesses want to grow, expand and do all sorts of things domestically or internationally and they might have some source of traditional financing, but often it's insufficient to realise their objectives.
“Being able to access additional capital outside of traditional sources is unlocking some of those growth opportunities.
“These business owners are not
necessarily focusing on trying to accumulate personal wealth, they're looking at becoming cash flow positive as soon as possible and relying on that cash flow to be able to unlock more growth opportunities.”
Coleman says non-bank lenders typically have the lens to better understand that, and analyse it as an existing working business, as opposed to just financial statements.
Advisers dipping toes in
About 70% of new business for Line Capital is coming from advisers – a figure Coleman says is growing monthon-month.
“We hear continually from advisers dipping their toe into business lending as an additional service, particularly to mortgages and insurance.”
Advisers interested in business lending often come from a banking or finance company background, understand financials and clients in that sphere.
“They can apply those skillsets and see a need for business lending,” he says.
“We like dealing with advisers. We see them as the frontman and that's where the relationship lies.
“We're just there to help facilitate what they're discussing with their clients.”
While encouraging more advisers to take on business lending, Coleman says there it is still a big education piece needed in terms of their understanding of the available products, what they mean and also comparing products for right-fit purposes.
“So that's on the lenders to fulfil, and we're looking to employ another business development manager to penetrate deeper into the adviser network throughout New Zealand, as it's an important channel for us.”
Bizcap
Advisers are also playing an increasingly central role in Bizcap’s growth.
Last year, about 55% of Bizcap’s deals were adviser-led, and that’s now risen to between 60–70% in any given month.
Rebecca del Rio, Bizcap global chief revenue officer, says there are several reasons for this momentum – the main one being the company increasing its lending limits to $4 million.
Del Rio says growing the adviser side is one of Australian-headquartered Bizcap’s key strategies in increasing business.
“It's about making SME finance easy and repeatable for advisers.
“We’re investing heavily in training, workshops, and digital tools so advisers
can confidently include SME finance in their product suite.
“Our goal is to ensure advisers can diversify their offering and become the go-to partner in their market.
“By giving them access to a wider suite of products and faster funding options, we’re strengthening their client relationships and helping more businesses access the capital they need to grow.”
Del Rio says Bizcap’s referral model makes the process simple: advisers provide basic client details, and the lender handles the rest, while ensuring they still earn commission.
“It makes SME finance both profitable and repeatable for advisers.”
Bizcap maintains small businesses’ ability to access working capital is critical to overall economic growth and job creation.
“Traditional banks often have more conservative appetites, longer processes, and rigid funding lines that don’t always align with the realities of running a small business.
“By contrast, non-bank lenders can provide the speed and flexibility SMEs need – funding within hours instead of weeks, and assessing applications based on both qualitative and quantitative factors,” del Rio says.
Bridging the gaps
Like other non-bank lenders, Bizcap finds there are also significant gaps in bank lending appetites across industries such as construction, hospitality, retail, trades, agriculture, e-commerce and transport/logistics.
“Non-bank lenders help bridge those gaps, ensuring SMEs in these vital sectors can access capital when they need it,” del Rio says.
Bizcap has seen a clear shift toward non-bank business lenders in New Zealand.
There are two forces at play: bank settings have remained steady and in some areas tight, while SME working-capital demand and cash flow requirements have risen.
That’s driven more small businesses to seek non-bank options that can fund within hours, not weeks, she says.
Bizcap lends to a broad mix of businesses across New Zealand from construction suppliers and transport and logistics operators to clinics, retailers, trades, e-commerce and agriculture.
“These are often industries that play a critical role in the economy but don’t always fit neatly within the criteria of traditional bank lending,” del Rio says.
“We believe our approach is different because we look at the whole business and its cash flow, which reduces reliance on credit scores. That allows us to support SMEs that may not tick every box, but are otherwise strong and growing.”
Bizcap, she says, also actively encourages advisers to bring in nonstandard or complex scenarios.
“By applying innovative decisionmaking and flexible structures, we’re able to provide funding that helps businesses access capital quickly and keep moving.”
AI not ousting humans
Del Rio says technology is central to Bizcap’s ability to deliver speed and flexibility, but it is careful to always keep a human in the loop, particularly when it comes to decision making.
“We recognise that no two businesses are the same.
“That’s why human oversight remains important in our process, ensuring that context, judgment and industry nuance are applied alongside technology.”
Its proprietary system combines data analysis with streamlined data flows, allowing Bizcap to issue conditional offers in as little as three hours and, in many cases, fund businesses on the same day.
“That efficiency is critical for SMEs, who often don’t have the luxury of waiting weeks for a decision.”
In the past two years, Bizcap has experienced strong growth, including back-to-back record months this year.
A major booster has been demand for its Business Line of Credit (LOC), offering lending from as little as $5,000 up to $4 million.
Prospa
Prospa managing director
Adrienne Begbie says non-bank lending has always been a big but underserved sector.
It is growing because there are options available for small businesses that haven’t been there before, she says.
The Australian non-bank lender has been in New Zealand for six-and-a-half years and client numbers have grown each month.
Across New Zealand and Australia, it has lent $4 billion in the past two years.
“Our growth trajectory is showing us that the market is there because small businesses are looking for funding,” Begbie says.
Prospa lends to any business. It says it is a small business lender, but in reality
it serves big business as well.
“If we're lending someone up to $500,000, that’s not a small business.”
Lending is across the board from industry, hospitality, Ray White rent rolls, trades and advisers buying a mortgage or insurance book, to - on the other side of the spectrum - accountants, lawyers, dentists and professional services firms.
Growing segments for Prospa are the healthcare sector and businesses looking for growth funding.
“While a large business will generally have bank funding because they have security to offer, smaller companies that don’t have security, or where the owner doesn’t want to put their house on the line and needs a fit-for-purpose product, will go to non-bank lenders.”
Begbie says while non-bank lending can be more expensive, loans are usually short-term.
The average length of a Prospa loan is two years, although it can be taken out for five years.
Of increasing interest to small businesses is the company’s line of credit product, as the tough economic environment means many firms are waiting longer for their invoices to be paid.
“Everyone is delaying payments,” she says.
“A business uses the line of credit for cash flow until its invoice is paid. That money then goes back into the line of credit to be used again when it is needed and the business is only paying interest on what it uses.”
To help analyse the workflow in the myriad loan applications Prospa receives, it uses AI.
As a lead comes in the door, AI will allocate it into the workflow. It will eventually also help sort out applications for funding the company doesn’t do –vehicles, for instance.
“It will help us to be able to manage that from the outset,” Begbie says.
Prospa is also looking at other AI options: how they will evolve and how they can be used more in the future.
Adviser business wanted
About 70% of the lender’s business is brought in through advisers, and it wants more business through this channel.
While most advisers do mortgages or insurance, they need to remember they can also help their customers with cash flow lending.
Begbie says for an adviser it is as easy as having a client sitting in front of them organising a mortgage application and
asking that client questions about their business – if they have one – and how they fund it.
“That will get a possible referral discussion going.”
She points out that at last year’s NZFSG roadshow, her colleague Huia Manuel played a client video and an adviser approached her afterwards and said, ‘Oh, that’s my customer’.
“It was an opportunity the adviser had not seen or realised was in front of them.”
Spot and refer
Prospa has a spot and refer model. Advisers are not giving advice; Prospa talks to the customer, does the application and pays a commission for the referral.
Begbie says in 70% of cases those customers come back for more funding after they have paid down their line of credit or small business loan.
“Then we pay the adviser again if more funding is agreed to.”
Prospa has two products – a small business loan that goes up to $500,000 for businesses that might, for example, be bringing a container or two of goods into the country, and they then pay it down, and the other is a line of credit, which allows a business, for instance, to borrow $100,000 but only pay interest on what they draw down – $10,000 one month or $20,000 the next month – and then pay it down.
“It’s a great product for businesses just wanting money as and when they need it.”
ScotPac
Small business lending is booming for ScotPac – and New Zealand general manager Lindsay Fisher thinks a lot of it comes off the back of the major banks having pulled back in terms of their credit appetite.
A lot of Australian-based research correlates across the New Zealand market and it shows 54% of SMEs in Australia are looking for a non-bank lender for new funding, which is up 15% on the previous year.
“So it's just growing year-on-year. And we find that as the world has sped up, the appetite from borrowers for faster lending decisions, flexible funding and cut-through on red tape seems to be where we win out,” says Fisher.
“The other piece is being a smaller provider gives us more of a one-on-one relationship with clients, unlike a massmarket model.”
Over the past three years, ScotPac’s
lending volumes are up more 80%. That’s down to natural growth in its book and the products it carries, Fisher says.
“We have also enhanced the product offering - initially in Australia and we are starting to do so in New Zealand.”
The company’s core products are invoice finance, trade finance, export finance and business loans.
The business line is its newest product, with loans of between $10,000 and $200,000 available for terms of between six to 12 months.
‘It's our job is to make them aware of what we do, how we do it and how it might be able to benefit their clients’
Lindsay Fisher
This month, ScotPac is launching a revolving line of credit to complement its Boost Business loans package and an as-yet-to-be-named selective invoice finance product.
In the loan space, businesses will be able to apply for either a term loan that amortizes down over time or a line of credit.
“That will give us the product suite that we're looking for, so we can say ‘yes’ to more New Zealand businesses,” Fisher says.
The new selective invoice finance product with no name is not going to have a minimum term.
Fisher says it is a product aimed at the smaller business who might not have heard of invoice finance as an option and might think, ‘Well, I can get it and try it for 12 months as I am not locked in’.
Security over ledger
As for security in the invoice finance space, Scotpac takes it over the debtors’ ledger, and not property, equipment or other assets.
“We do take security of the ledger, because that is essentially all we are lending against.
“In the business loan space, if a loan is under $100,000 it can generally be unsecured,” he says.
The company will generally lend to
any business that has been operating for 12 months or more through its Boost Business loans.
“That takes us into the B2C and B2B spheres and it is quite an expansion in terms of the markets we are wanting to serve.”
Expansion through AI
Helping the business expand, is Scotpac’s use of AI.
It is used on the front end, guiding customers through the application process, and also for monitoring financial behaviour.
“It can pick up patterns and flag behaviour, rather than us needing as many trained eyes on it as we previously had,” says Fisher.
“We can get early signals from clients who might be at risk of leaving, so we can make sure they're getting what they want from us.
“With business loans it can give fast credit decisions, so we can get funding out the door within 24 hours.”
Fisher hopes it never takes over the client relationship.
“I think probably across all industries humans want that human interactionor I hope they do.”
He says ScotPac’s aim is to have more of its back office work being done using AI so it can push the team out the front to spend more time understanding customers and helping them grow their businesses, rather than just being a product provider.
“And that's where we win against the big banks.”
Advisers main channel
Its main business channel is through advisers – whether it’s accounting, banking, business finance in general, asset finance specialists, business turnarounds or consultants.
“For us, it's our job is to make them aware of what we do, how we do it and how it might be able to benefit their clients.”
Fisher says it has always been ScotPac’s strongest area for gaining business.
“There is always room for direct marketing, but as we are often looking at a complex solution to fund a business, that type of business generally tends to come through the adviser channel - because businesses are looking for advice and then we are looking to be the end of that, the channel to provide the answer.” ✚
Straddling the ditch
Matthieu Olo-Whaanga can help raise equity against a New Zealander’s home to fund a deposit for an Australian house - or vice versa – all under the same roof. He talks to TMM about running an advice business on both sides of the Tasman.
BY SALLY LINDSAY
Matthieu Olo-Whaanga was not long out of university when he started doing $10 million-plus deals at BNZ. By the time he left to become a mortgage adviser, he had settled more than $500 million.
Half Māori (Ngāti Kahungunu, Waikato Tainui) and half Samoan (Foga’savai’i), Olo-Whaanga always had a clear goal in sight, though: to have his own business.
After buying his client book from the mortgage-advice firm where he previously worked, the born-and-bred Aucklander set up Tasman Finance Partners last year - and has just opened an office in Melbourne.
Olo-Whaanga talks to TMM about the industry, how he got where he is, and what needs to change.
Talking about change, what would you like to see?
Every adviser sits the same New Zealand Certificate in Financial Services (Level 5) qualification, is registered by the FMA, and treated the same by banks whether they specialise in residential, commercial or business loans. I think this needs to change.
There should be separate accreditation for advisers dealing in commercial and business loans.
In Australia, for example, a business or commercial deal can’t be submitted unless an adviser has specific accreditation from that bank to do so.
Accreditation means an adviser knows what they’re doing and gives them credibility. It should be the same in New Zealand. There are a couple of banks which have different approaches on this, but the issue still remains.
Your stock-standard residential adviser doesn’t know how to put that
sort of deal together, and in my view it’s not the banks’ job to be teaching them how to do so.
Do you think banks will take this on board?
It’s a good question. Banks probably believe that because they already hire business managers at $130,000 a year minimum to find new business in this area, it’s not necessary.
Why pay their salary, pay an adviser commission and perhaps a client cash contribution when they might not see any break even until year three or four of the loan?
We probably won’t see any action until consumers move more toward the Australian market where 45-50% plus of commercial and business deals go through advisers. In New Zealand, it’s probably less than 25%.
Once we see this figure rise, I think the banks will get on board.
Why did
you
become a banker?
Like a lot of people, I fell into it. After my parents worked their backsides off to put me through Kings College, I went to Auckland University and studied accounting and innovation entrepreneurship with a few commercial law papers.
I got through the final stages of an accounting internship at one of the big four firms, when I was offered a graduate position at BNZ.
Being very money driven at the time, because I was a broke student, I took the BNZ job as it was paying slightly more.
At my first meeting with the commercial and private bankers, I could see they were a lot more relaxed
Matthieu Olo-Whaanga
From
Grew up in Mangere East and have property in Mangere Bridge. Now living in Melbourne.
Family
I have a partner, Macauley, who works in the business with me, and our lab-cross dog, Lenny, who came across from New Zealand with us.
Outside Work
I play a lot of golf, exercise a lot and watch hours of NRL every weekend, supporting both the Warriors and Storm. I also spend a few hours a week working as the executive treasurer of Makaurau marae, my family marae at Mangere: basically running the books to make sure we have a sustainable income to fund other parts of what we do, and engagement around the hapu and iwi. It is one of the most modern and most utilised marae in Auckland. It also has a nativeplant nursery.
Favourite Podcast
Betsndat – about sports betting and all things sports. Hosted by sports betting legend and good friend Zeke, All Black legend Charlie Faumuina, NFL aficionado Chimes and broadcasting legend Nate Nauer.
Favourite book
‘Think and Grow Rich’ by Napoleon Hill.
Favourite music
Simply Red and Earth Wind & Fire are both outstanding bands.
Motto
Worry about tomorrow tomorrow.
and would talk to people like they were actually human - a completely different demeanour to that of accounting consultants and tax specialists.
After a few months of the graduate programme, I went straight into the commercial banking team as senior associate at BNZ’s Highbrook Centre –one of the biggest commercial banking areas in the country.
After a couple of years, I landed a business-manager partner role in West Auckland, doing all types of business loans, asset finance, trade and invoice finance – the works.
I took on client relationships, looking after their entire banking portfolios, including home loans.
What
made you jump into mortgage advising?
I did a couple of deals with Float Mortgages principal Naylon Cassidy. He was a legend.
We got along really well and always joked about when I was going to join his firm.
He had travelled a similar path, having also worked at BNZ commercial banking.
While it was satisfying doing big deals at the bank, I eventually left because I got tired of telling ambitious families and business owners ‘no’, when I knew there were options beyond the four walls of a bank.
I was at Float Mortgages for about three years.
What was the pivotal reason for setting up your own business?
It was twofold. I moved to Australia for something different, as well as for family reasons.
Initially, I worked remotely for my previous brokerage, but it got to the point where it wasn’t working for me being away from my team.
I also had a different vision of what I wanted to do, so it made sense for us to part ways.
I bought my client book and spent the first few months in the business working hard to pay it off.
What makes your business different from the standard residential advisory firm?
The fact that I bring commercial banking expertise to residential lending. We can assist competently with every facet of commercial/ residential/asset lending.
There is also a huge gap for people
migrating between New Zealand and Australia and vice-versa, and being able to get mortgage lending on both sides of the Tasman under one roof.
Even though the major banks in both countries have the same parent company, they don’t talk to one another and neither do advisers on both sides of the ditch.
We want to use our expertise, for example, to raise equity against a New Zealander’s home to fund a deposit for an Australian house or vice versa, all under the same roof.
‘We deal with a lot of big and complex clients. They don’t care whether you’re in outer space or on their doorstep’
Has it been difficult building a client base?
Not really. It’s not until you start your own business, and put yourself out there, you realise the extent of your contacts through school, university, rugby, work life, family, iwi, and growing up in Auckland, which is like a big village.
I’ve never had an issue with getting leads, deals across the line and networking with people; it’s just a natural thing for me.
More than 90% of my client base is self-employed people, who run their own businesses. That’s where I can add the most value.
In Australia, I intend initially to focus completely on commercial deals, because that’s where my skill set it better suited.
In New Zealand, the market is pretty small to be a commercial or business lending adviser exclusively.
How do you service your New Zealand clients when you now live in Melbourne?
It’s surprisingly easy. After Covid, people became used to doing business virtually.
Even when I was in Auckland, that’s how we would interact with clients. When people come to us, they want something done quickly, they want it done right.
We deal with a lot of big and complex clients. They don’t care whether you’re in outer space or on their doorstep. They just want to know that you’ve got the credibility and the capability to get what they need and to actually give them the right structure and good service.
Do you see your New Zealand business eventually fading away?
It’s interesting you ask that. The answer is no.
Although there’s more business to be done in Australia, already up to 85% of it goes through brokers, while New Zealand has only about 65% of all mortgage business going through advisers. So there’s actually a bigger market-share opportunity there than in Australia.
What
is the best part of being an adviser?
I’m a massive relationship person. I reckon I spend about five to six hours a day on phone calls with numerous different people.
The biggest thing I enjoy is helping people in a common purpose.
People think some stuff is impossible, and the people I deal with mainly are self-employed, which is a difficult mortgage group to get across the line. The majority of our deals get done in some form or another. We will always find a solution for our clients.
What is the biggest advantage you can give your business?
Being active on LinkedIn. I post a lot around how we are helping clients, show case studies, give people insights into how to fund commercial property, for example, or their next investment property – laying it out in a really simple way.
I am also regularly on social media and run a small budget of meta adverts that bring in consistent leads.
Do you expect your business to expand rapidly in the next two to three years?
Yes. Every month we’ve been consistently hitting new records since starting the new entity.
We have no signs of a slowdown and inquiry levels are always increasing. The addition of the Australian operations will start to supercharge things even more ✚
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WHY ARE PROSPECTS AFRAID TO PICK UP THE PHONE?
Gen Z and Millenials - those aged 25-45 - distrust advertising, don’t like to wait, and don’t like to talk to someone too early on in the process. Paul Wright explains how to connect with the new breed of desirable clients.
So, you’re on billboards, you search well on Google and run highfrequency ads on social media. Perhaps you are also on the radio and send out regular newsletters, so your brand awareness is high in your local or regional area.
But the phone doesn’t ring as often as you would like it to.
Now put yourself in the place of the prospect. He or she will be seeing such advertising from multiple brokers, not just you.
How can they tell you apart?
The loans you offer can be accessed through every broker in the country, as well as directly through most of the lenders.
Let’s face it, none of the products you offer is unique to you.
Sorry to start this article with such a negative, but you need to understand the psyche of the borrower.
How we buy
We can start by understanding how we buy things now.
It's easy to pigeonhole people based on their generation, but this is quite real in terms of behaviour due to a myriad of
research findings.
Gen Z (now aged 25-35, sometimes called Zoomers) and Millennials (now aged 30-45) stand out in particular, as these are clearly right in your sights as desirable clients.
These generations are characterised by wanting instant gratification, preferring to buy online rather than in person, and are
‘Why don’t they just call? A key reason is that they are wary of being ‘sold to’’
driven by customer service over price.
They tend to distrust advertising, politicians and the mainstream news.
They travel a lot.
Those you want as clients have little
patience for waiting for anything, are spending-focused, career-minded and are increasingly unlikely to have children.
When & how to connect
What does this sea-change in thinking from just a couple of decades ago mean for brokers?
It means they are reluctant to speak to someone too early in their search.
They want to browse anonymously (use of VPN’s is now widespread and accelerating), gather information, and avoid highpressure or awkward conversations.
They are far more likely to fill in a web form, use live chat, or book a call online, rather than pick up the phone.
Why don’t they just call? A key reason is that they are wary of being ‘sold’ to, preferring an ‘asynchronous’ conversation where they have already done their homework and want to feel in control.
They are happy to buy online, even for big purchases.
Examples in our own backyard include how buying from Amazon, Shien, Temu and AliExpress has significantly impacted sales of clothing (Shein now has 40% of the US clothing market), books, electronics, DIY
items – and these giants are causing the collapse of traditional department stores and malls.
I know someone who negotiated to buy a used Bentley Continental online, sight unseen, for multiple six figures. He told me it was just easier, and that he hated car salespeople.
In finance, online mortgage applications (or at least pre-approvals) are becoming normalised in New Zealand. So how do you fit in?
Added to all this is a slow housing market, so the question is, what should brokers do?
Where to start
To start with, have a critical look at your online presence. If they live online, so should you.
If you haven’t already, on your website, have simple, five-question web-enquiry forms; have a ‘Book-a-Chat’ online calendar where they pick their own time.
Use the word, ‘chat’ as it's more how they want to interact; have lots of blog entries and videos to educate them on the mortgage process; have an AI-driven live chat running so they can ask questions
at midnight; look to use WhatsApp or Facebook Messenger to communicate, and, as we are now so visual, include lots of infographics or diagrams of the process and flow of the application.
Blog often
I don’t know why so few brokers have a well-populated blog page.
Blogs can significantly increase your search rankings and show you to be the expert.
The headlines need to address the prospect’s fears and desire for knowledge.
Example headlines could include, ‘How much deposit do I need?’ ,‘What if I’ve been declined before?’, ‘Should I go fixed or floating?’, ‘Why use a broker and not go direct to a bank?’
At 500-700 words - and with a videonone of these, or others like it, is hard to write.
You know these topics without any need to research them.
Base them on the fears or concerns that prospective buyers have.
Here are some more - fears which stand in the way of people picking up the phone:
• Fear of being judged: “I don’t want someone looking down on my finances. I’ve been told that they look at our streaming accounts and how often we get takeaways.”
• Fear of wasting their time: “What if they just try to upsell me or can't actually help?”
• Fear of pressure or sales tactics: “They’ll probably pressure me to apply when I’m not ready.”
• Fear of looking unprepared or uninformed: “I don’t even know what I should be asking or bringing.”
• Fear of being ‘sold’ something worse than going direct: “They’ll probably steer us towards one particular lender as it pays a higher commission, even if it's not the best for us.”
• Fear that it will cost them money: “Is this going to cost me? I thought brokers were free, but are they really?”
• Fear of being told NO: “What if I don’t qualify for anything and feel embarrassed?”
• Fear of complexity: “The whole mortgage process is overwhelming. I don’t want to feel stupid.”
• Fear of backhanders: “They will probably suggest a real estate agent who gives them a kick-back.”
Buyer power
The tables have turned from the seller to the buyer being in control, in almost all industries.
‘Those you want as clients have little patience for waiting for anything, are spending-focused, career-minded and are increasingly unlikely to have children’
Paul Watkins
We no longer respect geographical boundaries and are happy to buy from anywhere in the world.
We live our lives online and are never separated from our phones.
Consumers increasingly want to know more before buying almost anything.
Think of it this way. Doctors will tell you how patients come in with a printout from ‘Dr Google’ in their hands, and a staff member of an appliance retailer told me how it's common for customers to challenge them on brand performance and the price compared to other retailers.
This is all due to their online homework before walking in.
Why would mortgages be any different?
So, if you want the phone to ring or for more webforms filled in, recognise these fears and their desire to learn more before they call and have the answers on your website.
That’s how you build trust and have them choose you over others. ✚
Paul Watkins is a marketing adviser to the financial services industry.
Why you and your advisers should embrace advice on ACC
Advisers sometimes forget that ACC is a form of insurance, yet can deliver significant value by advising clients about the various forms of ACC cover.
Opinion: So, you’re an FAP with some life advisers. Are they including advice on ACC (Accident Compensation Corporation)?
Although compulsory, ACC is still a form of insurance. And for self-employed clients in particular, life advisers can add significant value.
This opinion piece relates only to those clients who are self-employed.
For self-employed ‘workers’, ACC offers an alternative to the their default products, Cover Plus and Workplace Cover.
This alternative product is called Cover Plus Extra (CPX)
CPX doesn’t happen automatically. To get it, qualifying self-employed workers must make an application for it, preferably after getting suitable advice.
Significant advantages
CPX comes with options and some significant advantages over the default products, such as the ability to select the amount of cover the client wants (within a set upper and lower range).
Advisers can add significant value to their clients by ensuring they incorporate advice on ACC cover options into the life and disability plans they are recommending.
Understanding CPX and its benefits will allow advisers to recommend it where this is suitable.
In some cases, it may be suitable for advisers to recommend a cover level lower than actual earnings, because this will reduce ACC levies payable.
Understanding CPX and other ACC benefits will allow more suitable recommendation of the private income protection and other products required to cover any shortfall in weekly compensation that comes with a reduced level of cover, impacting disability and loss of other benefits payable by ACC.
It’s worth pointing out that some providers’ income protection products are better than others at replacing lost ACC benefits where CPX cover is reduced, so advisers need a good understanding of the different income-protection policies available, too.
Downsides of lower cover
Advisers must also understand that there are downsides other than a reduction in weekly compensation/monthly disability benefits when reducing CPX cover.
For example, loss of death benefits, which must also be made up as best possible with private insurance.
Here again, there are private insurance products which will loosely match ACC benefits lost - and others that won’t.
Advisers will be required to explain these various options to their clients, so that they are able to make informed decisions about accepting any recommendations.
Reducing CPX cover and levies may not always be the obvious recommendation, however.
‘Being able to get suitable levels of cover for clients otherwise unable to get income protection delivers real value’
In some circumstances, it may be wholly unsuitable to recommend the minimum amount of cover available under CPX.
Recommending the maximum available may be the right advice, particularly for clients new to business or otherwise unable to get disability cover - or enough of itunder private income covers.
Being able to get suitable levels of cover for clients otherwise unable to get income protection delivers real value, even if cover is largely, but not exclusively, caused by accident (some workplace illnesses may also be covered).
Accurate code important
Advisers can further add value by helping ensure that ACC is accurately recording the
client’s ‘classification code’ (their occupation code).
ACC levies are determined largely by the type of work clients perform and significant savings can be had by ensuring the client is accurately classified.
My suspicion is that an adviser’s name is much more likely to come up at the proverbial barbeque if that adviser has reduced the ACC levies the client is liable for!
Know your stuff
Of course, life advisers should have sufficient knowledge to ensure their advice and recommendations are suitable, and given with the standard of care, diligence and skill “that a prudent person engaged in the occupation of giving regulated financial advice would exercise in the same circumstances” (Section 431L of the FMC Act).
If your advisers are not suitably skilled in advising on ACC issues relating to life insurance advice, they will be at a competitive disadvantage at best, or, possibly even found wanting for failure to comply with their obligations to ensure suitable advice for clients - and that clients understand the advice they are getting (or not getting).
Latest changes to the Code of Professional Conduct for Financial Advisers make it clear that FAPs have a duty to ensure their advisers continually develop their competence, knowledge and skill, including, it seems to me, on ACC and its products.
CPX is an important insurance tool, with benefits for some clients that are unmatched by private income protection.
This makes advice on ACC something that all life advisers should have in their arsenal if they are serious about creating suitable outcomes for their self-employed clients. ✚
Steve Wright – Has qualifications in economics, law, tax, and financial planning. He has spent 20 years in sales, product, and professional development roles with insurers. He is now independent and helping advisers navigate the new advice expectations.
This article is for information purposes only, its content is the writer’s opinion and intended to be of a general nature, does not take into account any person’s specific circumstances, and is not financial, legal, or other advice. It is recommended you seek advice from a suitable expert before taking any action in relation to anything contained in this article.
‘An adviser’s name is much more likely to come up at the proverbial barbeque if that adviser has reduced the ACC levies the client is liable for’
Steve Wright
The Top 10 stories on tmmonline.nz
A lot has happened in the market since the last edition of the magazine. Here are the most-read industry stories from tmmonline.nz
01 WESTPAC LOOKS TO CAN TRAIL COMMISSIONS
Westpac is proposing to alter the way it remunerates mortgage advisers who originate its mortgages and remove trail commissions.
02 VETERAN ADVISER SAYS LEVEL 5 STANDARD ISN’T GOOD ENOUGH
The new Financial Advice Code comes into effect on 1 November 2025, but veteran adviser and Certified Financial Planner Nigel Tate says its updates don’t go nearly far enough.
03 WESTPAC DECISION “A BIT OF A TRAGEDY” - ADVISER
Westpac’s negotiations with New Zealand mortgage aggregators about ditching trail payments comes just seven months after it partnered with fintech Dosh to offer home loans without financial advice and a loyalty cashback reward.
04 PREDICTIONS FOR BIG OCR DROP NEXT MONTH
Westpac and Kiwibank are predicting a 0.50% OCR drop next month after the economy “slammed into reverse” in the second quarter of this year.
05 OCR DOWN 50 POINTS: WHAT THE RBNZ SAID
The Reserve Bank has cut the OCR 50 points to 2.5%.
06 BANKS
TARDY ON MAKING CHANGES TO CLAWBACK POLICIES
Only one of the major banks appears to have made changes to its clawback policy despite it being one of the 14 recommendations in last year’s Commerce Commission’s report into retail banking competition the Government is implementing.
07 HOW BOLD WILL THE RBNZ BE?
A cut from the RBNZ next week is all but a done deal. The only question is how much it will be – 0.50% or 0.25%?
08 WHY SOME MORTGAGE ADVISERS SAY SPLITTING IS GOOD WHEN INTEREST RATES ARE LOW
While the Reserve Bank is expected to cut the OCR to 2.5% by the end of the year, the age-old question being faced by mortgage advisers from clients about whether to float of fix their mortgage interest rate is more common now than ever before.
09 JB STEPS BACK AT SQUIRREL
Squirrel has made two key changes to its senior leadership line-up, as it positions itself to further capitalise on recent momentum and growth.
10
NAVIGATING THE FUTURE OF MORTGAGE ADVICE
NZHL General Manager, Franchise & Distribution, Paul Barnes, looks at the future of mortgage advice.
To keep up with all the news make sure you check www.tmmonline.nz regularly. Or you can get the news and rates update sent to you each day.
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