Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Bank targets, not mortgage commissions, need to go

Bank targets, not mortgage commissions, need to go

Mortgage advisers’ commissions are not the problem and should be left well alone; it’s bank enforced targets put on mortgage brokers that are the issue, says Southern Cross Partners – a peer-to-peer mortgage lender that does not pay commissions.

Southern Cross Partners Director Terry Butler, says moves by New Zealand’s Commerce and Consumer Affairs Minister, Kris Faafoi, to introduce legislation banning sales incentives from the finance industry are a concern because it will concentrate more power in the hands of the banks.

“I call on Minister Faafoi to instead scrutinise the performance targets that some banks put on mortgage advisers – many of them border on coercive.

“If a broker hasn’t put a certain volume of business through a particular bank, the bank cuts them out – that’s the problem. Commissions are a good thing, and even better if Government moves to create a fair playing ground for advisers; perhaps through a uniform commission structure.”

Butler says it is in the best interests of the consumer that the independent adviser survives, but public trust needs to be restored.

“I’m not saying public trust doesn't exist because of anything the mortgage advice industry has done. I’m saying trust has been shaken by attacks on the industry from politicians, regulators and the media.”

Butler says trust can be restored or shored up with measures such as a code of conduct, regulation, more skills training and a uniform commission structure across the sector – not less, but the same across all the banks.

“Potentially, independent digital platforms are as much a threat as Australia’s financial services royal commission – how long will it be before we get a Trivago version for banking and finance?”

He dismisses a ‘user pays’ fee scheme as too onerous for home buyers and unworkable because consumers will go straight to the bank to avoid fees, thereby centralising power in the hands of the banks.

“It’s true that at Southern Cross Partners we don't pay commissions. Instead, advisers charge their clients a fee which is added on to the loan, but that is because more expertise is required to put a deal through and the deals are short term, averaging 12 months instead of 30 years like the banks.

“Our model may well become the standard for the adviser industry. It’s unfortunate and not in the best interests of the consumer when it comes to standard mortgage deals, but sometimes the opposing voices are so loud that common sense falls by the wayside.”

For more information about P2P investing (including the risks) visit or contact your investment adviser

© Scoop Media

Business Headlines | Sci-Tech Headlines


DIY Law: Government Exempts Some Home Improvements From Costly Consents

Homeowners, builders and DIYers will soon have an easier time making basic home improvements as the Government scraps the need for consents for low-risk building work such as sleep-outs, sheds and carports – allowing the construction sector ... More>>


Media Awards: The New Zealand Herald Named Newspaper Of The Year, Website Of The Year At Voyager Media Awards

The New Zealand Herald has been labelled a “powerhouse news operation” as it claims the two biggest prizes – Newspaper of the Year and Website of the Year – along with many individual awards at the 2020 Voyager Media Awards Website of the ... More>>


ASB Bank: ASB Takes The Lead Again With New Low Home Loan Interest Rate

ASB has moved again to support its customers, cutting a number of home loan rates, including the two-year special rate to a new low of 2.69% p.a. Craig Sims, ASB executive general manager Retail Banking says the reduced rate will be welcome news for many ... More>>


Nathan Hoturoa Gray: The Problems With Testing And Case Statistics For Covid-19

To begin to understand disease transmission in a country requires adequate testing of your population with properly vetted, accurate tests. As the world struggles to find what 'adequate percentage' of the population is necessary, (estimates predict ... More>>


RNZ: Fletcher Building To Lay Off 1000 Staff In New Zealand

The construction company will cut around 10 percent of its workforce as it struggles with the fallout from Covid-19. More>>


Can Pay, Won't Pay: Cashflow Moves Urged

Government Ministers are asking significant private enterprises to adopt prompt payment practices in line with the state sector, as a way to improve cashflow for small businesses. More>>


Gordon Campbell: On Why We Should Legally Protect The Right To Work From Home

For understandable reasons, the media messaging around Level Two has been all about “freedom” and “celebration”, but this is not necessarily going to be a universal experience. When it comes to workplace relations, Level Two is just as likely to ... More>>


Telecoms: Spark Welcomes Spectrum Allocation And Prepares For 5G Rollout Over The Next 12 Months

Spark welcomes spectrum allocation and prepares for 5G rollout over the next 12 months Spark today welcomed the announcement of the direct allocation process of 5G spectrum, with the Company to be offered management rights to 60 MHz of 3.5 GHz ... More>>


Trade: Record Monthly Surplus As Imports Dive

Imports in April 2020 had their biggest fall since October 2009, resulting in a monthly trade surplus of $1.3 billion, Stats NZ said today. “This is the largest monthly trade surplus on record and the annual goods trade deficit is the lowest ... More>>


Media Blues: Stuff Chief Executive Buys Company For $1

Stuff chief executive Sinead Boucher has purchased Stuff from its Australian owners Nine Entertainment for $1.
The chief executive was returning the company to New Zealand ownership, with the sale is expected to be completed by 31 May.
"Our plan is to transition the ownership of Stuff to give staff a direct stake in the business as shareholders," Boucher said in a statement.... More>>


RNZ: Bar Reopening Night 'much, Much Quieter'

Pubs and bars are reporting a sluggish first day back after the lockdown, with the fear of going out, or perhaps the joy of staying home, thought to be a reason for the low numbers. More>>


Stats NZ: New Zealand’s Population Passes 5 Million

New Zealand's resident population provisionally reached 5 million in March 2020, Stats NZ said today. More>>

NIWA: Seven Weeks Of Clearing The Air Provides Huge Benefits: Scientist

Seven weeks of lockdown has provided evidence of how pollution can vanish overnight with benefits for the environment and individuals, says NIWA air quality scientist Dr Ian Longley. Dr Longley has been monitoring air quality in Auckland, Wellington ... More>>


Government: Milestone In Cash Flow Support To SMEs

A significant package of tax reforms will be pushed through all stages in Parliament today to throw a cash flow lifeline to small businesses. More>>


University Of Canterbury: Astronomers Discover The Science Behind Star Bursts That Light Up The Sky

University of Canterbury (UC) astronomers are part of an international team that has revealed how explosions on the surface of a white dwarf star can increase its brightness by thousands or millions of times making it look like a new star. For ... More>>

Air NZ: Air New Zealand Adds Business-timed Flights For Regions

Air New Zealand will operate business-timed flights in and out of a number of regional ports from next month.
The flights will allow customers in Hamilton, Tauranga, Napier, New Plymouth, Palmerston North, Nelson, Dunedin and Invercargill to undertake a day of business in either Auckland, Wellington or Christchurch... More>>