ASB accelerates mortgage lending and profit margins

Yes, ASB are clearly anti adviser and have been so for a while now. ASB branches can provide preapproval for customers over 80% where they block the adviser third party channel from doing so. ASB branches can hold discount rates for customers for 48 hours for re-fixes, where advisers cannot, and as we are in a rate-increasing market an adviser can quote a rate to the customer, but that rate can change that day without giving that customer enough time to make an informed decision without pressure. Where are the dealer groups? And the FMA on this, crickets chirping. ASB then wonders why advisers are not giving them business.

Was disappointed to learn recently that ASB is issuing non property specific preapprovals above 80% LVR to customers who go direct to them whilst telling the mortgage adviser channel that these approvals are not currently available for customers. This may have been happening now since last year when the ASB “traffic light system” was first introduced for mortgage advisers. It’s always a worrying trend whenever banks like ASB actively encourage customers to avoid dealing with the mortgage adviser channel by been dishonest with their ability to provide pre-approved finance. I’m not sure how mortgage advisers are supposed to be having relationships with banks that do this to us. Both the Commerce Commission and Financial Markets Authority would be very interested to learn the above as this is a clear breach of both consumer law and the recently passed CoFi legislation which all banks must adhere to now. ASB told us last year that 500 accredited advisers have not sent them a single deal in over 12 months. I wonder what that number will be sitting at in another 12 months’ time if the bank continues on being dishonest with us. And the head groups? You guessed it. Missing in action as usual.

I'm surprised ASB mortgage lending has increased. ASB rates have generally been uncompetitive. ASB's 35-day refix policy is dreadful, with rates now increasing; it is a massive disadvantage for customers. It's difficult to recommend ASB.

Happy New Year Everyone, No surprise to hear ASB are doing this, I wonder if there recent sales figures above, are all inclusive of all channels, including Go Home Loans with AIA, as I understand Advisers have placed higher volumes via AIA than ASB in recent years, due to the far better Adviser relationship structure in place, which ASB is now removing going forward, once an AIA loan is restructured, it will forever leave the AIA platform, and Advisers will lose access to and visibilty of that client data for servicing. A really dum idea, and does not improve the advice position given to clients, especially when more branches are closing, and all communication is directed via call centres with no personal knowledge of the client, or their situation. (There is a really really really good reason Life insurance companies distribute their products via Advisers !) A question to ask the FMA and Commerce Commission: Why is it ok for NZ banks to incentivise churning of loans across banks in NZ with Cash backs from the banks, when it is banned in Australia to reduce this behaviour, and in Australia the remuneration model for Advisers is the same across banks, with upfront and trail commission, to again deter an Adviser from moving clients bank to bank just for commission, but also to remunerate Advisers for servicing the clients, and saving the banks many thousands more in overheads. Am I not right, that the entire reason the Financial Services industry went through licensing, and many legislative changes, was to bring NZ to the same level of most other Western international countries, and raise the industry to a Profession so consumers could be provided Advice when making a major financial decision ? If I am right, then why are we (NZ Mortgage Advisers) not following the same service model as in Australia, which we hear the Commerce Commission referring to so many times over recent years, as the standard we should be at or follow? Let's hope David Seymour reviews our legislation and red tape, rules etc, as for the many of us Advisers who have complied with all the requested changes, the education standards, and increases in business costs, and we see some positive change. Adviser Man