Urgent change demanded
The recent departure of non-bank lender Resimac from New Zealand has ignited a call for substantial changes in the country’s banking and lending sectors.
Leigh Hodgetts (pictured above), the country manager for the Finance and Mortgage Advisers Association of New Zealand (FAMNZ), criticised the current state of the industry.
“It’s crazy that a lender has pulled out of our market quoting a restrictive regulatory environment,” Hodgetts said.
See LinkedIn post here.
Advocating for mortgage advisers
Hodgetts highlighted the crucial role of finance and mortgage advisers in fostering competition within the home lending market. She remarked on the government and regulators' tendency to underestimate the sector.
“Even though there seems to be some lack of understanding about mortgage advisers, even within government agencies, around 50% of New Zealanders use a finance and mortgage adviser for their mortgage,” Hodgetts said.
Hodgetts stressed the importance of advisers, noting their rigorous compliance and ethical standards compared to bank staff.
“Finance and mortgage advisers have far more strict criteria than bank staff around compliance, ethics, regulation, and financial advice,” Hodgetts said.
Comparative success abroad
Hodgetts pointed to higher engagement with mortgage advisers in countries like Australia, where they are involved in over 70% of mortgages. She cited research showing that a vast majority of Australian mortgage broker clients trust their brokers and plan to continue using them.
“The vast majority of Aussie borrowers can’t be wrong, yet here we still have questions around competition, conflicts of interest, and disclosure, which are based on misinformation, not facts,” Hodgetts said.
A call for systemic change
The call for a new direction is clear, with Hodgetts arguing for a move away from outdated practices to embrace innovative approaches that benefit consumers.
“The bottom line is that we need a more competitive lending environment in our country, and finance and mortgage advisers drive this,” Hodgetts said.
She concluded with a vision for the future, emphasising that embracing new methods would ultimately benefit consumers.
“We must move on from the old ways and embrace the new, and the winners will be consumers,” Hodgetts said.
Read the FAMNZ media release here.
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