New Zealand's aggregator sector is at a turning point. Reduced trail commissions, rising AI adoption, delayed open banking and shifting adviser expectations have forced a rethink of the traditional aggregator model. NZ Adviser brought six industry figures together at Onemata Restaurant in Viaduct Harbour, Auckland, to examine what comes next. Topics ranged from business valuation and diversification to cybersecurity risks and what genuine business partnership between aggregator and adviser actually looks like in practice.
The Westpac trail change shifted advisers from a 0.60% upfront plus 0.20% trail model to a single 0.90% upfront payment. That triggered a complete rethink of how advice practices are structured and eventually sold. Bruce Patten, chief executive and managing director of NZFSG, says earnings-based valuations are now replacing the old trail-multiple approach. 'In five years, we'll have a really clear understanding of what a business is worth,' Patten said. 'We're moving away from a multiplier of trail as a way of valuing a book into an EBITDA [earnings-based] valuation.' Warwick Slow, chief executive of Kiwi Adviser Network (KAN), notes that a new generation of advisers is already building with exit value in mind. 'One of the most popular podcasts that I've recorded in the last two or three years was one where a business owner talked about selling his advice business for eight figures,' Slow said.
KiwiSaver, insurance and commercial lending are the three most frequently cited gaps for New Zealand mortgage advisers. Jenny Campbell, country manager for Finsure in New Zealand, is direct about the cost of inaction. 'They're just leaving so much on the table with their clients,' Campbell said, 'and it's an area that is just so underused in New Zealand.' Slow argues the logic is straightforward: advisers have already paid to bring the client in, so extending that relationship costs little at the margin. Cameron Muggeridge, partner and mortgage adviser at Loan Market Central, frames commercial work as a service-quality issue as much as a revenue one. 'We see it as a multifaceted opportunity,' Muggeridge said. 'Not just helping commercially but also helping the staff of those business owners as well.' April Hastilow, founder of Factor Financial, warns that chasing product breadth at the expense of relationship depth risks making advisers indistinguishable from a comparison website.
Most participants favour a careful, methodical approach to AI. Muggeridge described a disciplined trial process at Loan Market Central. 'We have trialled AI agents gently at this point, due to AI moving and developing so fast, and haven't found one that is easily implemented within the business,' he said. Lenska Papich, general manager of Mike Pero Mortgages, sees AI in a supporting role rather than a central one. 'We believe AI will play a key role in streamlining adviser processes and increasing efficiency,' Papich said. 'Advisers still need to be providing nuanced, relationship-based advice.' Hastilow applies a practical editorial test to any client data decision. 'Think of it as a newspaper heading,' she said. 'Whatever you're about to do now, think of it going wrong. Are you comfortable? Can you defend yourself? If you can't, probably don't do it.'
The risks are measurable. The latest annual Kordia cybersecurity report shows 44% of New Zealand businesses had suffered a successful cyberattack in the previous 12 months, with almost one in six attacks involving AI vulnerabilities or misuse. Campbell flagged the common mistake of using free AI tools that pass client data to unsecured servers. 'A lot of people don't realise that using stuff for free off the internet is not necessarily secure,' she said, 'and they're putting a lot of personal information, or their clients' personal information, up into the ether.' Patten adds that even paid tools carry risks most users never investigate. 'Everybody's paying to use stuff. Nobody checks their security protocols,' he said. 'The first thing I ask them is, "Do you have SOC 2? Do you have an ISO certificate?" None of them do.' Slow recommends two-factor authentication, a password manager and locking computers when unattended as immediate first steps.
Reactive compliance is widely seen as inadequate. Papich ties the answer to organisational culture rather than systems alone. 'Genuine value also looks like reinforcing a culture of doing the right thing even when no one's looking,' she said. Mike Pero has gone further, launching a commission model that links remuneration directly to quality metrics. Patten draws on a cautionary cross-Tasman example where a fraud case at one advice business caught hundreds of advisers in the fallout. 'The risk is that everybody gets tarred with the same brush from one business,' he said. 'We need to be ruthless in our determination of whether someone should remain in your business.' Slow reframes the compliance burden entirely. 'Compliance isn't just a secondary annoyance; it's essential for success,' he said. 'If you look at the guidelines and what the legislature is looking for, it's not just there to keep you busy. It's good business practice.'
Open banking is arriving in New Zealand, but too slowly for most participants. Campbell was unsparing. 'It is appalling that it's been so slow coming,' she said. 'It's such a no-brainer to be able to have all of your banking information in one place and to be able to easily transport it to a new provider.' KAN is currently obtaining an open banking licence, with Slow looking to Australia's disappointing uptake as a reference point for what New Zealand should avoid. Patten sees one semi-major bank still to come on board, but warns that some advisers are already using unvetted third-party tools to access open banking-style data. 'I'm talking about third parties that advisers are using to get open banking information that do not have security protocols,' Patten said. 'That's what worries me.'
The transactional aggregator model is giving way to something more substantive. Patten is clear about what the shift requires. 'We aggregators are no longer just there to process loans and collect commissions,' he said. 'We're actually there to help them grow now. But that comes at a cost. We can't be in a race to zero when it comes to how we run the businesses going forward.' Campbell points to Australia, where brokers hold over 80% market share, as a target for New Zealand. 'Brokers in Australia have over 80% market share, and the vibe is different,' she said. 'It's much more positive, proactive, energetic.' Papich anchors Mike Pero's partnership model in brand investment and marketing reach. 'Around a quarter of Mike Pero settlements can be attributed to marketing and the power of our brand,' she said, 'and our goal is to continue increasing that source of business to better support our franchisees.'