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Although always an ever-changing landscape, business was exceptionally challenging for New Zealand brokerage firms during the past year.
The emergence of the COVID-19 Delta variant and its associated restrictions disrupted business operations, with an extensive lockdown period further taking its toll on the sector. In addition, new laws governing financial advice came into effect in March 2021. Under new regulations, to give financial advice to retail clients, individuals now had to obtain a Financial Advice Provider (FAP) licence or be engaged to operate under an FAP licence as a financial adviser or nominated representative.
The Financial Services Legislation Amendment Act introduced these changes to ensure that the conduct and client-care obligations of financial service providers and the regulation of financial markets remains fit for purpose. The Act also addresses the misuse of the financial service providers registered by offshore entities.
Then, late 2021 saw the implementation of the Credit Contracts and Consumer Finance Act (CCCFA), which was intended to protect vulnerable buyers from overestimating their capabilities in the face of soaring house prices. Under the CCCFA, lenders have additional obligations when determining the affordability and suitability of a loan. This prompted them to review clients’ income and expenditure in much greater detail and determine expenditure previously considered discretionary as non-discretionary to meet new requirements, according to The Financial Review.
As a result, successful home loan applications dropped to 30% in December 2021 from 36% previously, as reported by the credit bureau, Centrix.
The tightening of regulations may have presented opportunities for New Zealand brokers, however. Though new developments may require further upskilling, never has engaging a bespoke service that can provide access to deep market knowledge and solid lending advice been so prudent.
“It will always be a human goal and dream that drives every transaction … That’s why my career changed from being a commercial banker to becoming my customers’ financial partner”
Alex Wang, Alex Wang Consulting
Amid challenging conditions and shifting goal posts, the founders of the winning brokerage firms are pioneers who possess an unexpected and infectious enthusiasm. Built on seemingly unshakable foundations, these companies have proven their agility in the most formidable conditions, consistently providing exceptional advice to their clients and making dreams come true.
“It’s all about dreams,” says one winner, Alex Wang of Alex Wang Consulting. “It will always be a human goal and dream that drives every transaction… That could be a first home, property investment, first business, or commercial expansion. That’s why my career changed from being a commercial banker to becoming my customers’ financial partner,” he explains.
He appreciates having a small team that’s big on talent, noting that the team members share the same values and optimism about the future.
Resilience and remaining positive are common traits among this list of nine, with many prioritising both their team’s wellbeing and constant communication with clients.
For example, Brandon Leung of mortgagehq reveals how he kept his team’s spirits up during lockdown.
“We increased the frequency of team video calls – just checking in with people and finding out what they were finding challenging or stressful. We tried to organise games and fun activities over these calls to keep our team culture strong.
“We tried to promote over-communication as a tactic within the organisation and with clients. This helped everyone understand why things were being done in a certain way or why certain information was required.”
Leung says he is proud of his team whose work ethic and continuous pursuit of improvement deserve to be celebrated.
“We are still learning as we go, and it feels like we are only just getting started,” he adds.
Fellow winner Jordan Cameron of Total Mortgages also found restructuring communication beneficial. “We had to rethink our approach to how we kept our clients informed about what was going on, which resulted in setting a realistic deadline from the get-go and adding in extra updates along the away. As a result, we saw a lot more satisfied customers and positive feedback.”
Holly Sullivan of The Mortgage Girls is another winner who overcame adversity and maintained a refreshingly positive outlook.
“There are always two choices: sit back, cross your arms and hope a problem goes away, or embrace change, see the positives, get to understand why a problem is there, what impact it will have on a clients’ dreams and how we can work with them to help them achieve their goals,” she says.
Sullivan says that at The Mortgage Girls, it is of utmost importance to keep up with market and environmental changes, and that the company wants to always be evolving so it can make its services better for clients.
“We love helping people achieve their home ownership goals. Whether they are ready now or ready later, that doesn’t matter to us, we are here for the long haul,” she says.
“There are always two choices: sit back, cross your arms and hope a problem goes away, or embrace change, see the positives, understand why a problem is there, what impact it will have on a clients’ dreams and how we can work with them to help them achieve their goals”
Holly Sullivan, The Mortgage Girls
Having ridden out the trials and tribulations of 2021, these leading companies are now looking towards a bright future.
Alex Wang says his company hopes to expand its business in Auckland and is opening its first boutique building in the second half of this year. Then, he will be based in Melbourne to continue setting up a new office in South Yarra.
“We will continue to put people first. That means every one of our customers and every member of my team. Lending is not just about an interest rate. We will constantly innovate in terms of our systems and technology to reshape and adapt our business to help more people,” he says.
For Holly Sullivan of The Mortgage Girls, having a Financial Advice Provider Class Licence 2 and being one of the top 5% of businesses in New Zealand to obtain this license is an achievement to be proud of. Nevertheless, the company prefers to maintain its current structure.
“We love being a boutique business, we have never had the ambition of being the largest company in the industry, we are of the mindset that there is the right person for everyone. … I would like to see The Mortgage Girls provide more advisers with the tools, resources and support they require to help everyday Kiwis achieve their goals,” she says.
To establish this year’s line-up of the most prominent industry players, NZ Adviser invited brokerages in New Zealand to submit their accomplishments for the period 1 November 2020 to 31 October 2021.
To be eligible, brokerages needed to have one or more loan writers in a single office headquartered in New Zealand. Aggregator information was also provided by applicants, and their aggregators were then required to verify the details submitted.
The application also asked for details such as the number of active brokers working at each company, as well as total loan book value and conversion rate.
The nominees were evaluated across four areas: total loan book size, average settlements per loan writer, total settlements in the specified 12-month period, and conversion rate.
3 winners are franchise brokerages
6 winners are independent brokerages
5 winning brokerages have been operating for six years