Award-winning adviser shares solutions
New Zealand's mortgage adviser industry, a crucial link between borrowers and lenders, is facing a wave of challenges.
Long hours, frustrated clients, and limited access to information are putting pressure on advisers, who are calling for significant changes from banks and industry organisations.
Leading the call for change is Eugene Bartsaikin (pictured above), director of Twine Financial Advisers in Auckland. Bartsaikin won the Select Adviser of the Year – Independent & Franchise at the 2023 NZ Mortgage Awards and was named among the top 25 advisers in New Zealand in 2024.
Here are the three biggest challenges advisers are currently facing, according to Bartsaikin:
1. Managing client expectations on turnaround times
One of the biggest headaches for advisers is managing client expectations in a fast-paced market. Tight deadlines and bank delays often create a stressful environment, and it’s rare that all stakeholders are on the same page.
“We had a situation where a client was attending an auction within six working days – it would have been enough time before, but I worked all through to 11pm at night within the same day the client told me to ensure the application was submitted.
“In the end the client didn't get their approval on time.”
Fortunately, Bartsaikin did the due diligence to prep the client beforehand.
“This client understood that it wasn't my fault, but not every client is like that… They ended up taking a risk and bidding on an auction without finance in hand,” he said.
“They knew I told them not to bid, but when that happens all the responsibility still falls on the adviser to get the outcome.”
2. Managing existing clients’ loans
Another major hurdle is limited access to client loan information making it difficult to manage existing clients’ loans.
According to Bartsaikin, banks limit the amount of information advisers have access to for loans they had arranged and usually ask the adviser to question the client for details.
“As a result, we have incomplete information at the time we assist our clients with renewals.”
Financial Advice New Zealand estimated that by the end of 2023, the portion of home loans written by mortgage advisers was between 45% and 50%.
Given this industry trend, Bartsaikin said mortgage advisers have become the “customer’s preferred new branch”.
“Innovations need to take place to give more visibility for mortgage advisers to their clients loan balances and other basic information so we can help the clients more easily,” said Bartsaikin.
3. Adviser remuneration
The current commission structure is another point of contention for advisers.
Many feel the upfront commission is too high, while the ongoing trail (a commission paid for servicing the loan over time) is too low.
Bartsaikin said he would love to see all lenders have the same common structure or a lower up-front and an ongoing trail.
“This minimises clawback risk and more accurately reflects the level of work to provide an ongoing service to clients,” said Bartsaikin.
“Also, this takes any perceived bias around remuneration from some industry commentators.”
Who can make the change?
Bartsaikin feels the industry lacks a strong voice to advocate for change.
While some lender Business Development Managers (BDMs) are supportive, their power is often limited.
"BDMs can be helpful, but they're restricted by resources and competing priorities," Bartsaikin said.
However, Bartsaikin feels that there is “inadequate representation of mortgage advisers” to push for better outcomes for the mortgage industry.
“Aggregators do what they can, but collectively it still feels like they have inadequate power where realistically nothing much ever changes. This is despite [the fact that] over 50% of business is written by mortgage advisers,” said Bartsaikin.
A 5-point plan for a more efficient mortgage industry
Advisers are proposing a five-pronged approach to address these challenges:
- Increased resources at banks
“Banks need to over-resource not under-resource,” said Bartsaikin.
- Right-sizing the credit approach
According to Bartsaikin, banks need to make a “right-size” credit approach to make simple requests more efficient to process. If simple requests were made more efficient, it would free up resources for more complex cases.
- Prioritising turnaround times and collaboration
Banks should prioritise turnaround times across the board and utilise their branch staff for assessment for adviser business rather than competing, Bartsaikin said.
“Mortgage advisers have been growing their market share and clearly most consumers prefer this channel, so there is no need to compete against it and instead work on efficiency.”
- Stronger representation
“We need stronger representation and for professional associations to push for better outcomes for the industry,” Bartsaikin said.
- Common commission structure
A standardised commission structure across lenders would benefit both advisers and clients, Bartsaikin said. It would provide more stability for advisers and ensure they are fairly compensated for the ongoing service they provide.
