Slower market pushes advisers towards diversification, efficiency and scale

The conversation across adviser networks is changing. While advisers still want support generating leads and writing more business, there is a growing focus on what sits behind those results – better systems, stronger client relationships, broader advice capabilities and businesses that can grow beyond their founders.

Andrew Chambers (pictured), CEO of Tella and Newpark Financial Services, says one of the most immediate areas of demand is compliance support.

“It has been a big year for compliance, with more file reviews from banks and increased scrutiny across the board, they need to lift what they are doing. So advisers are looking to their groups for more support in these areas.”

Chambers sees the growing demand for this support as a positive sign of a maturing profession. However, it is not the only area in which advisers are looking to strengthen their capabilities.

“We are seeing many more advisers looking to move into the risk and investment spaces.

“They recognise that they either need to cross-sell more or become less reliant on one income stream. Newpark is making a strong push towards more holistic advice, and we want to see advisers approach every area of advice that way.”

Growth remains the priority, but its meaning is changing

Kiwi Adviser Network CEO Warwick Slow says growth is still the most common request from advisers, although it can take several forms.

“Growth is the main request. That's leads, growing adviser numbers, and lifting the advisers they already have so they're giving better advice to more customers.”

In previous markets, growth may have been largely associated with increasing personal settlement volumes. Today, more advisers are looking at the structure, capability and long-term value of the business itself.

“The focus has moved from adopting technology to using it properly. More advisers are also thinking about how the business is structured to grow, not just how they personally write more business,” Slow says.

That includes recruiting additional advisers, improving productivity and developing services that can produce revenue beyond residential lending.

“I'm seeing more advisers thinking about diversification, efficiency, bringing more advisers on and building something long term rather than transactional advice.”

Chambers is observing the same transition. He says advisers increasingly recognise that building a saleable business requires more than accumulating trail income or maintaining a client book that relies heavily on its founder.

“The business needs to have something that can transcend the individual adviser,” he says. “For many, that comes back to cross-selling and diversification. Adviser businesses are maturing, and I think the general trend will be towards larger, full-service businesses rather than individual operators. It is happening slowly, but the direction is clear.”

Reinvesting tech savings

Artificial intelligence has quickly become central to discussions about efficiency. However, the question is no longer simply whether advisers are using AI, but whether it is creating meaningful improvements across their businesses.

“AI has improved adviser efficiency so quickly that the question now is whether they're getting everything out of the tech stack they already have,” Slow says.

Chambers reckons technology can reduce the time advisers spend completing bank forms, preparing Word documents and managing other administrative work. However, the greater opportunity lies in how that saved time is reinvested.

“If AI is used well, it creates significant efficiencies, but advisers should then reallocate that time back into growing their businesses and building client relationships,” he says.

This is also changing recruitment patterns. Rather than using productivity gains to expand their administrative teams, Chambers is seeing firms invest at the client-facing end of the business.

“We are not seeing the same growth in administrative roles. Instead, businesses are bringing in risk advisers, mortgage advisers and other people who can contribute directly to advice and sales."

A slower market is accelerating diversification

Advisers are also adapting to a lending environment that remains uneven across regions and customer segments.

Slow says volumes have softened following a temporary boost from bank incentives late last year.

“It's slower than in previous years. There was a spike around December with the bank cashback offers and numbers have been declining since. This feels like a mix of a tough economy and the upcoming election affecting people's decision-making.”

For some advisers, quieter conditions are creating the impetus to expand services they had already been considering.

“Yes, though this has been happening for years as the market shifts. Current conditions are probably just the catalyst for someone who hadn't quite committed to it yet,” says Slow.

Chambers says Newpark’s overall results have remained relatively positive, but the pattern of activity has been unusual and regional sentiment varies considerably, which has encouraged many advisers to move away from the highly transactional, product-led approach that was more common before 2022.

“They are looking after clients more closely, providing better advice and building deeper relationships. There has been a definite shift away from being purely transactional.”

Strong performers focus on what they can control

Both network leaders point to client relationships as a defining feature of stronger adviser businesses. Chambers says they are investing more time in their existing relationships and remaining visible to clients and referral partners.

“The top performers tend to work longer hours, cross-sell more effectively and operate more efficiently,” he says.

“They are not just focused on completing the mortgage transaction. They invest time in relationships, generate referrals and stay present with clients. If you are not out there, you are unlikely to remain top of mind.”

Slow says the strongest advisers also maintain perspective when external conditions are difficult.

“They think big picture and have a strong personal or business brand behind them. They go above and beyond for customers, even the ones who don't bring in revenue, and they focus on inputs rather than the things they can't control. 

“You can't control a quiet market, but you can control the work you do.”

Over the next 12 months, Chambers expects compliance support to remain important as the industry responds to heightened fraud risks, regulatory expectations and potential conflicts. At the same time, advisers will want education that directly supports commercial growth.

Slow says the fundamental priorities will remain familiar, even if the emphasis continues to evolve.

“The core need stays the same – improving how they give advice, and growth. 

“What changes is the emphasis, so expect more focus on squeezing value out of existing technology, diversifying, and staying disciplined on inputs.”