Advisers say deals are becoming increasingly difficult to get through
NZ Adviser’s 2020 Advisers on Banks survey generated some interesting insights into banks’ relationships with their third party channels – and it seems experiences on the adviser side have been mixed this year.
Survey participants were asked to recall the best and worst things a bank has done for them over the past year, and while advisers were keen to praise individual BDMs and low interest rates, complaints included long turnaround times, tough credit criteria and declined deals.
Advisers particularly noted that banks have become much tougher with their credit criteria throughout COVID-19, and particularly after the first April lockdown, to the point where deals they believe should have been approved have become very difficult to get over the line.
Read more: Advisers on Banks survey results revealed
The positives
Advisers overwhelmingly praised the support of individual BDMs who helped their clients along their mortgage journey, with one respondent commending a BDM who “will go over an application and fight for approval if deemed necessary.”
Acceptance of tricky deals was also appreciated, particularly in unique cases where a loan might normally have been declined.
Responses to ‘what is the best thing a bank has done for your business or client in the last 12 months’ included:
“The leniency and flexibility that the banks offer the higher-profile clients have provided a great experience for them.”
“Looked outside the square for a client with a brain injury and came up with a solution.”
“Our BDM is amazing and fights for deals to be approved and declines to be overturned.”
“Continuing to provide a full home loan package including a decent calculator, BDM, mortgage ops, branch support, flexible loan products and a sustainable commission model.”
“Rang 100% of their clients during lockdown and offered them a repayment deferral. Amazing team work.”
“Despite a credit impairment which would normally be a decline, the bank accepted an explanation and approved the loan.”
“Gave a lower 'test' interest rate and were able to get a new loan through after it had been declined by two other major banks.”
Read more: Advisers share which banks have been supportive through COVID-19
The negatives
Unsurprisingly, turnaround times were the biggest complaint among advisers, though many also felt that credit criteria has become too rigid and restrictive since New Zealand entered its first lockdown.
Deals getting declined was also a significant issue, with many advisers feeling like good deals with longstanding clients had been turned down for no good reason.
Responses to ‘what is the worst thing a bank has done for your business or client in the last 12 months’ included:
“Turned down a client with whom it had a long-term, stable relationship and took a long time to tell us, resulting in costs to the client.”
“Turnaround times and ridiculous tightening of credit decisions has gotten out of control. It is taking a long time to get a ridiculous answer. The pendulum has swung too far.”
“All of them have been too pessimistic coming out of COVID-19. They’ve been scaling down income due to clients taking the first round of wage subsidies, or for no sales during the April lockdown.”
“Extreme credit policy tightening to the extent that if all major banks did the same, I believe we would have significant property market issues.”
“Approved a property as security as part of its conditional approval, then declined the property later in the process, at significant cost to the client. Referred client to branch staff to close a credit card, then 'stole' client after giving them 3 years’ guidance. Poor form!”
