Advisers angered by new BNZ pricing conditions

Yes, Westpac are now offering interest rates direct to customers via their internet banking that they won’t offer the third-party channel, yes that’s right a two-tier pricing system.
Let’s think about this for a moment, in good faith advisers bring new business to Westpac with the adviser having a strong relationship with their client, at the fixed rate roll over time Advisers goes to Westpac for new interest rates for their customer so they can then have a discussion with their client giving them great advice and the customer can make the best-informed decision possible about their mortgage lending going forward into the future.
Advisers locks in an interest rate for the client, but wait! , client confirms they have just seen a better interest rate offered to them via their internet banking , the discount is better than what third party banking can do and better than any advertised specials , all the client needs to do is click to accept online with no advice given, that’s right not one peace of advice given around rate term , loan term ,repayments personal circumstances , future plans ,etc etc.( how embarrassing for the adviser ).
ASB also now only offer new interest rate pricing direct to customers online (no advice) as they said this is what customers want but that’s not actually accurate, advisers get calls all the time from Customers wanting help /advice on what to do next with their mortgage loans, some are confused /’stressed /panicking, it’s a huge decision to make especially in a rising interest rate environment and most customers do not want to just click on line and hope for the best.

Drawing customers toward accepting a better pricing tier online will no doubt save banks money as the “Human contact” element of the transaction has been taken away but is this “Responsible lending “?
And why try and cut advisers out or sever the adviser /client relationship? advisers only to trying to give the best service and advice they can by having the customers best interests at heart and can keep these relationships for 5,10, 20 years.

Westpac have not communicated to advisers that they now have a two-tier pricing system for Customers which is interesting in itself, where are the dealer groups on this? are they doing nothing, just now concerned about their insurance overrides, possibly, silly me thinking groups were “mortgage aggregation “ / support , times have changed .

Well said valkyrie6. Mortgage advisers simply cannot have a relationship with lenders that treat us and our customers this way. Really hard for an adviser now in a licensed regime to be endorsing a lender like BNZ to their customer when other banks have equal/superior home loan policies that don't disadvantage them financially.

BNZ have a proven track record of being anti-broker offering things direct that aren't available via the broker channel i.e. pre approvals above 80% borrowing that are currently a "red light" to mortgage brokers but available via BNZ branches and the BNZ home loan direct line. BNZ simply don’t value the broker channel the way that other lenders like ANZ do.

As for Westpac's latest gaffe of offering superior interest rates now to mortgage broker customers that we are unable to match ourselves this is clearly all part of a two part strategy to sever the customer's relationship with their broker 1) educate the customer not to go back to their broker to renew their interest rates and then 2) offer them a pre-approved home loan top-up of $10,000 post-Christmas to consolidate short term debt etc. which thus means the relationship has changed back to the customer dealing with Westpac directly and the broker's eligibility for their trail commission ceases. Make no doubt about this folks, this is a deliberate move by Westpac to reduce the amount of trail they are having to pay on mortgage broker originated home loans.

As an industry we simply cannot allow Westpac to introduce this new policy above as we failed miserably a few years back to stop Westpac increasing claw back periods from 18 to 24 months and look where we are now with some banks going out as far as 27 & 28 months. Collectively we have the power to vote with our feet and shift our business to competitor banks which mind you should be happening already given that Westpac has the least flexible extra repayment policy on fixed rate home loans of any main bank lender. My group tells me that applications to Westpac were already dwindling so Westpac’s move now to seemingly antagonize mortgage advisers would have to be one of the dumbest moves by a main bank that the industry has seen. The new incoming Westpac CEO looks like she will have her work cut out for her in changing what appears to be a very dysfunctional culture now within the current Westpac third party banking team when it comes to them wanting new business from mortgage advisers.

Westpac like the ASB are not allowing their home loan customers the opportunity to access independent advice from their mortgage adviser around an appropriate home loan structure when it comes time to refix their loan’s repayments. This is especially important in a rising interest rate environment like we are experiencing now. Perhaps Phil you and the Good Returns team can have a good chat to the FMA about whether they think main bank lenders who behave like this are still compliant with their obligations under the responsible lending guidelines that all lenders must adhere to? I think I already know what the FMA will say about this….

So in conclusion if you are a mortgage adviser who is currently supporting either BNZ or Westpac with business it's your decision as to whether you think this is still a wise move going forward. Personally I’d rather endorse a lender who actually cares about customers and them being able to access independent advice from their mortgage adviser.

He who holds the Gold calls the shots.

Retired Banker

@ michaelb

True. But when it comes to ASB at least I think you will find the Gold there now has diminished significantly.

I fully expect that some of the banks next year will go back to having long periods of them not being able to pre-approve home loan applications above 80% even for their existing customers. We are nearing closer and closer now to the extra bank capital holding requirements being introduced into law by the Reserve Bank in July 2022.

For some of the banks to keep lending now it's all about capital or should I say lack of.