Grosvenor, which is soon to be rebranded Booster, offers an investment platform service to financial advisers and is also a default KiwiSaver provider.
Managing director Allan Yeo (pictured) says that advisers and other firms need to take on the banks and their dominant position in the financial services market.
There are $230 billion worth of home loans in New Zealand and it is a market worth competing in, he says.
Grosvenor is entering as a “disruptor” and is “going to fight back”, he says.
Grosvenor will first target KiwiSaver members who want to buy their first home, however it plans to roll it out to other borrowers “very quickly”, Yeo says.
A key point of difference is that borrowers will be allowed to use investment funds, as security.
“No bank will lend against an investment portfolio” he says.
Yeo says many of Grosvenor's KiwiSaver members are the children of existing customers. Under the product loans can be secured against investments they have with the company. Currently Grosvenor will lend up to 60c in the dollar if the money is in a balanced fund and that number will be higher for low risk funds and lower where investments are in more aggressively managed funds.
It is not possible to use KiwiSaver funds as security.
Yeo says the home loan product gives Grosvenor advisers another opportunity to have a conversation with clients, and its remuneration model gives advisers the opportunity to add value to their businesses.
The other unique part of the package is that advisers will be able use a variable commission structure like that used by some life insurance companies. Remuneration options can be selected for each loan written.
Also there is a separate set of home loan rates for advisers who work on a fee-for-service basis.
Grosvenor will essentially become another aggregator working with RESIMAC.
Grosvenor plans to rebrand itself Booster next month.
Booster prime home loans are priced as follows:
- Floating 5.19%
- One-year 4.79%
- Two-years 4.52%
- Three-years 4.76%
- Four-years 4.88%
- Five-years 4.88%