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NZ Adviser’s Fast Brokerages had a spectacular year, with their total volume of loans settled increasing by 92% to $2.38bn in the year to June 2022, up from $1.24bn in the previous year.
The 16 winners also individually achieved over 30% growth in combined revenue and settlement volume.
“Answering every call and email as soon as you can makes a huge difference,” says Ben Mune, owner of 2022 Fast Brokerage Ascend Financial Services in Auckland.
“I believe that the reason why the company has grown so quickly is the planning. We always hold planning and goal-setting activities to ensure that the goals of the team and the management are smart and realistic”
Clarice Parinas, Future Secure Financial Services
He intends to hire several advisers in 2023 but will concentrate on business loans and begin offering KiwiSaver advice. Such diversification into other lines is part of a derisking strategy of moving away from residential to help the company continue to grow.
Future Secure Financial Services (FSFS), a Wellington winner, has also seen rapid growth.
“I believe that the reason why the company has grown so quickly is the planning. We always hold planning and goal-setting activities to ensure that the goals of the team and the management are smart and realistic,” says director and financial adviser Clarice Parinas. “The management level of the company has an ongoing five-year business plan, which we discuss every six months with our accountant.”
Having a clear strategy is also something that Rod Schubert Financial Advice (RSFA) has put into play. One of its key initiatives is adopting a service-led approach. “The perception of service can be very individualised. What we aim to do is guarantee, starting with myself, that we are committed to exceeding service expectations, and [that is] reflected in our company motto, ‘Real advice, in really easy-to-understand terms’.”
RSFA’s multimodal approach has allowed the company to grow from one person, founder Rod Schubert, to a team of five advisers. It’s now looking to grow its revenue substantially. “We would like to hit a milestone of $1m turnover,” explains Schubert. “We feel that this is possible in the next year as a stretch goal; however, within two years as a firm target, I feel we have the right baseline to realistically hit our financial targets.”
Technology played an important role in keeping turnover high.
“We saw how the online and Zoom meetings worked to our advantage as we literally could hold or meet people more than the way we did before in face-to-face meetings,” says Parinas. “We were able to continue and even open more avenues to meet with clients because of the online meetings technology,” she says.
Meanwhile, mortgage adviser Daniel Kuo at Loan Market Paramount in Christchurch, also a 2022 winner, says culture plays an important role in his company’s success.
“I believe working with the right team makes all the difference. Having a strong foundation and the support from the team helps me to go far. Of course, we have to consistently provide good service and a genuine care for our clients.”
And he explains that brokers are in high demand as the market evolves: “People need the help of a mortgage adviser more than ever; they understand that they can no longer just rely on one bank ... they need [a range of] lending options.”
RSFA believes that being as multicultural as possible is an important policy for growth. The brokerage already has a Tagalog-speaking adviser and wants to go further to serve the different communities in New Zealand. “We are looking favourably, however not exclusively, at Tongan/Samoan-, Mandarin- or Hindi/Punjabi-speaking mortgage adviser applicants moving forward and are excited about this prospect,” says Schubert. The company has also embraced digital media and produces its own podcast, Finance Today with RSFA.
“People need the help of a mortgage adviser more than ever; they understand that they can no longer just rely on one bank ... they need [a range of] lending options”
Daniel Kuo, Loan Market Paramount
Interest rate hikes by the Reserve Bank of New Zealand started in October 2021, and there were also changes to the Credit Contracts and Consumer Finance Act (CCCFA) in December 2021, ushering in a new level of bank scrutiny for loan applications.
“Our business has grown at a much faster pace since the [new] CCCFA rules were first introduced,” says Sanjeev Jangra, adviser at 2022 Fast Brokerage Loan Market in Manukau.
“Lending rules and banks’ appetites have been changing on a regular basis; hence, more borrowers now prefer to deal with a mortgage broker for advice,” he says.
Jangra estimates that up to 50% of new residential loan market business in New Zealand now comes via advisers, up from the last official figure of 40% given in 2017 by the now-discontinued Professional Advisers Association.
Financial Advice New Zealand business development manager Jen Latham sees potential for brokerages to continue increasing their volumes if certain systemic issues are addressed.
“The adviser and banking relationships need work,” she says.
“The banks do need to lend for their own objectives, but they certainly could look to support the adviser network, and this in turn would help the adviser’s business to grow.”
This is echoed by some advisers who view the current economic headwinds as opportunities to grow their businesses.
“With rising interest rates, inflation still high and the housing market cooling, 2023 will be a tough year for everyone. I see a good opportunity here for us as more and more people turn to advisers,” says director Jordan Cameron of 2022 Fast Brokerage Total Mortgages in Hamilton.
And the adviser channel is set to play a more important role as banks increasingly pare back direct consultation with borrowers.
“This trend likely has more to run as banks continue to move to exit their branch network,” says John Moody, chief financial officer at non-bank lender Basecorp.
Economic headwinds look likely to persist over the next 12 months, but some of NZ Adviser’s Fast Brokerages see that as an opportunity to thrive and grow their businesses even more.
Indeed, businesses are expanding and diversifying their service options.
“Our growth strategy is to expand our mortgage team [from seven] up to 10 mortgage advisers nationwide by the end of 2023, with three currently in training,” says Parinas.
FSFS will also expand its insurance team and take on more KiwiSaver specialists.
In New Zealand, financial advisers can provide services including insurance broking, investment advice, mortgage broking and financial planning. Financial Markets Authority data shows that personal insurance accounts for 70% of financial products that advisers provide advice on, followed by KiwiSaver at 48%, with mortgage products and consumer credit contracts each at 37%.
Jangra will add a new mortgage adviser and a loan writer to his staff shortly, while Jen Taylor of Taylored Mortgages in Palmerston North is taking on another adviser and moving to a larger office in January, less than two years after launching her business.
“We are doing good still – extremely busy,” she adds.
“Answering every call and email as soon as you can makes a huge difference”
Ben Mune, Ascend Financial Services
RBNZ data shows that the pace at which residential lending grew was around 10% higher than in the previous fiscal year.
And in mid-2022, first home buyers were enticed into the market due to changes in May to house price limits relevant to accessing government grants and loans. Jangra says this dynamic may continue.
“There's a bit of uncertainty in the finance industry with rising interest rates and falling property prices, but that is where the opportunity lies for the first home buyers and the investors to purchase long-term-hold properties,” he says.
Non-bank First Mortgage Trust in Tauranga anticipates another dynamic year in 2023 and believes that focusing on areas with a strong local economy will be the best strategy.
“With an uncertain 12 months ahead of us, funders will always gravitate back to key regional areas with good fundamentals – growing populations, employment and good infrastructure,” says strategic partnership manager Bruce Smith.
“Advisers need to have a full product suite they can utilise. There are still good deals out there to be undertaken for the right borrowers.”
“What we aim to do is guarantee, starting with myself, that we are committed to exceeding service expectations, and [that is] reflected in our company motto, ‘Real advice, in really easy-to-understand terms’”
Rod Schubert, Rod Schubert Financial Advice
NZ Adviser invited submissions for its second annual Fast Brokerages awards on 15 August 2022 as the publication sought to recognise New Zealand’s fastest-growing mortgage brokerages. The research team asked brokerages to list their revenues and settlement volumes for the 2020/21 and 2021/22 financial years, in addition to other growth milestones.
The NZ Adviser team then evaluated the nominations to determine which brokerages performed outstandingly. Those that achieved over 30% growth in combined revenue and settlement volume were given 5-Star awards.
A total of 16 brokerages made the final list this year. NZ Adviser also highlights six brokerages as Fast Starters – those that have been in business for less than three years but have already made their mark in the mortgage landscape. All of these brokerages have confirmed their resilience and cemented their position in the New Zealand mortgage industry.