Sitting as the third biggest national aggregator behind NZFSG and KAN, Link Financial Group (LFG) now has 240 advisers working across mortgages, insurance and KiwiSaver.
Roberts says growth opportunities in the adviser space are huge. “The channel of choice towards the adviser market has shifted significantly in New Zealand, although we are way behind Australia.”
Across the ditch 80% of mortgages are written through advisers, while in New Zealand it is just on 55-60%. “It will continue to grow here as every measure, whether it’s regulation, licensing or other parts of the sector, is seemingly always five to 10 years behind Australia, which gives me optimism about the future.”
He landed at LFG after being made redundant when Bluestone Home Loans pulled its capital, sold its New Zealand book and retreated back to Australia.
As Bluestone supported LFG as a sponsor, Roberts knew the network and worked closely with founder and previous chief executive Josh Bronkhorst who hired him to lead the distribution team and build the adviser side of the business.
He was working on revenue options in the white label and non-bank space at the end of last year when he realised it was an avenue he was passionate about and told the LFG board he would be leaving.
At the same time Bronkhorst fell ill and had to step down, so Roberts extended his stay for six months, which stretched out to nine months, for adviser continuity and stability while Tim Larkin took over as general manager.
He was pleased to be at the FANZ lifetime achievement award to Bronkhorst earlier this year.
Although he is leaving LFG after just two years, he says it is a “great home” for advisers in terms of licensing, the referral networks and support provided plus the ability for a locum to take over while an adviser takes a break.
The referrals capacity for advisers is a huge, Roberts says. “It enhances different ancillary revenues on the back of losing the trail income from Westpac, and it also builds their network to become a trusted financial adviser. Although they might specialise in mortgages, they are able to build up proper referral networks around them, for example in fire and general and asset insurance, foreign currency, ACC advice, to help their clients on their full lifecycle.”
Leaving his career options open, Roberts is taking an extended family break before putting his toe back into the non-bank and specialist lending space, which he feels will take off in the next five to 10 years.
“Hopefully the market will move more towards the Australia model where the non-banks and challenger lenders are increasing market share with the products they have in the CCCFA and non-CCCFA fields, so consumer behaviour and mindset shifts towards what can be done in the alternative lending space.”
Roberts thought on the back of the pandemic, OCR changes and rampant inflation, non-bank lending was starting to get a hold locally, but that was dashed when Resimac and Bluestone retreated and pulled out of New Zealand for different reasons.
“Since then it has been a bit of a struggle in that space and there has not been a CCCFA player take up the gap.
He says there is a huge opportunity and a runway for new players. “It interesting to see who is able to capitalise.”
Roberts suspects it will be more of a domestic play, whether or not it’s tied to funding out of Australia. “In May Finbase secured a $150 million funding line with Sydney-based Challenger, so there is potential appetite for offshore funders to fund lenders here, but those businesses will probably have to have New Zealand-based directors involved to a degree.”
Whether the adviser market would react kindly to a Bluestone or a Resimac trying to make their way into the New Zealand market is open to debate, he says.
“The other question is whether the market is big enough for other Australian lenders to entertain the costs of setting up here. There is a definite opportunity, but it will probably have to be New Zealand-led.”
Non-bank lending is still geared towards residential property lending, he says, although investors have pulled back significantly. “There are a lot of specialist loans available for alternative borrowers who don’t fit the main banks’ criteria. And Kiwis’ number eight wire mentality has been buy property, buy property. Tied up in this are professional property investors who have access to a range of products that suit their needs.”
Roberts says while there is a shift in property investment, with a couple of major banks not picking prices to get back to their 2021 peak until about 2029, there are still plenty of opportunities in residential first-backed security as well as potential commercial deals. Non-CCCFA is also still big in terms of what is available for lenders and advisers.
“Lending might not be at its peak to where it was, but there are going to be some green shoots.”
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