Matthieu Olo-Whaanga
He says the NZQA New Zealand Certificate in Financial Services (Level 5) is not enough for advisers new to the industry who have little business or life experience.
“That's not to say, that we make it harder for people to get into the industry, but there should be a lot more knowledge added to the qualification and perhaps a proviso that new advisers once they have their certificate go through a two-or three-year registration process similar to valuers and other professions, or a mentoring programme.”
Olo-Whaanga set up Tasman Finance Partners in October after buying his client book from Float Mortgages where he has worked for several years.
It took him only a couple of months from the six months allowed to study and gain the Level 5 certificate, but he had significant business and life experience before starting.
After studying accounting and innovation entrepreneurship at Auckland University, he worked for the BNZ in the bank’s commercial and business banking arm where he managed $10 million plus deals under every type of funding scenario.
Switching to Float Mortgages about five years later, Olo-Whaanga says he got tired of telling ambitious families and business owners "no" when he knew there were options beyond the four walls of a bank as he understood both the numbers and the bigger picture.
While he has an extensive background in mortgage lending, he says it is too easy for people to become advisers without any experience.
“People can just roll into the industry and start advising people on the biggest asset they will probably have in their lifetime once they their Level 5 qualification, have arranged professional indemnity insurance, registered with the FMA and signed with up an aggregator.” Olo-Whaanga says it is not to their advantage nor to their clients.
“It takes time and a lot of experience to deal with lending and proper loan structures, as well as being able to manage people and their expectations, high levels of emotion and stress. “Without experience and mentoring new advisers are just being set up for failure.”
For many inexperienced advisers they don't know what they don't know, he says. “It's a fine line between putting a loan structure on paper the might look good and having no understanding how things work in reality and what the worst case scenario is.”
He says he would advise newly minted advisers to become a client services manager for a couple of years to learn in the industry inside out, how to structure loans and deal with borrowers and all the emotions and questions they have, particularly if they are buying their first home.
Olo-Whaanga says for example, new advisers can be employed by a bank and be protected by its safeguards and processes, but they will get things wrong sometimes. If that is translated into an advisory business with only two or three advisers, it might have minimal failsafe protocols, and things can go catastrophically wrong.
Preventing people from joining the mortgage lending industry because they don't have the prerequisites is not the aim, he says, but he feels there should be a more strenuous programme or qualification for new advisers and even adopting the Australian regulation of a two-year mentoring directive could be considered in New Zealand.
“Something like that would be beneficial because what you're trying to protect ultimately is people setting clients up for failure. They might be over leveraged or they might try and buy a property which on paper they can afford but in reality it's not doable for their long term goals.”
While, he doesn’t have a definitive answer, Olo-Whaanga says there needs to an update in the skills and qualifications required by new advisers.
