Why bank changes are good for advisers

The days of face-to-face banking may be numbered with the big banks closing branches around the country in the wake of Covid-19, but this change could work out well for advisers.

Hamish Patel

Since New Zealand entered lockdown on March 26, ANZ, ASB, BNZ and Westpac have permanently closed 32 branches.

Many of the banks’ remaining branches continue to operate on reduced hours.

As an example, just last week ASB announced that nine of its branches would not reopen, while 25 branches would permanently move to operating three days a week.

This changing bank environment is not a popular one with many customers, but it’s a development which could serve advisers well.

Mortgages Online’s Hamish Patel says it could herald a golden age for advisers because clients now need to find their own way going forward – and advisers can help with that.

The new environment will be challenging for some people who will struggle because they are not savvy with technology, he says.

“Maybe a client used to have a relationship with the bank manager in their branch but that will have to be different now.

“So if they don’t want to, or can’t, engage with banks via technology and want face-to-face interactions advisers could be a good option for them.”

Technology has levelled the playing field too and that means it all comes down to effective marketing, Patel says. “Any adviser with a good online presence can get in there and get their [the branches’] business.”

AdviceHQ’s David Green agrees the branch closures are a positive development for advisers, but says the changes were happening anyway.

“Covid-19 sped up the whole process of moving to online but that old relationship people used to have with their banks had already started to fundamentally fall away.”

One interesting aspect of it though is that, usually, if banks close branches there is lots of emotion and this time there hasn’t really been, he says.

“Due to Covid-19, people seem to have an understanding that times need to change and they have to move with the times and into the online world.”

But Green says that people who are not technology aware may not be aware of advisers and that they have options beyond their bank manager.

That means advisers need to ensure they offer and market their services as a viable alternative to their branch manager.

For Go2Guys’ Campbell Hastie, Covid-19 also exacerbated a trend of people looking for better, more independent advice and that’s a positive for advisers.

But he says it’s worth noting that while advisers might introduce clients to the banks more, banks now have digital options around functions like refixing mortgages which can circumvent the adviser.

“So the digitisation of services pushes people away from branches to advisers but it can also push advisers out once the client has established a relationship with a bank.

“Banks would say that it’s up to the advisers to maintain a good relationship with their clients. But it could be the thin edge of the wedge for some advisers.”

It’s all part of the broader digitisation of financial services, not just banking, Hastie adds. “It’s a trend that is not going away, it will only intensify.”


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