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Relationship Banking
Articles posted on 17 / 12 / 18

We all need to have a good working relationship with the bank.  Not only do banks provide core services so we can conduct our everyday transactions but also very few of us are in a position to buy a home or service business enterprises without support and finance options from a bank. We also need our banks to be profitable so there is stability in the supply of essential services.

Most of us assume that the advice provided by our bank is the best solution for us and is offered at their most compelling rates – on both term deposits and borrowings.  Sadly, for too long we have been overly complacent in this area!

This complacency, however, has been blown out of the water by the Banking Royal Commission in Australia and the flow on effects here in NZ.  

We all need to have a good working relationship with the bank.  Not only do banks provide core services so we can conduct our everyday transactions but also very few of us are in a position to buy a home or service business enterprises without support and finance options from a bank. We also need our banks to be profitable so there is stability in the supply of essential services.

Most of us assume that the advice provided by our bank is the best solution for us and is offered at their most compelling rates – on both term deposits and borrowings.  Sadly, for too long we have been overly complacent in this area!

This complacency, however, has been blown out of the water by the Banking Royal Commission in Australia and the flow on effects here in NZ.  

While banks now need to look at ways to enhance the care and due diligence each bank officer provides to their customers – our advice remains that you are best served by seeking specialist professionals who can offer you a solution that is specifically tailored to your personal situation, and importantly can compare different options from various providers to find the best solution for you.

Mortgages and debt borrowing need to be structured to your best advantage – and sometimes this means looking outside the box when it comes to the right solution.  The same logic applies with re-fixing mortgages –a mortgage broker not aligned to any particular bank can make a lot of difference here by ensuring the rate and structure of your borrowings is the best solution for you.    

We had a recent case in point where we assisted a client to significantly reduce their outgoings:  

A doctor had borrowed over $1.0m principally to fund practice development and after approaching his bank manager, was offered the full loan amount at commercial terms of just over 6% p.a. When we met this doctor some 12 months later, we were able to identify that he had considerable equity in residential properties he owned. With a bit of application, we were able to refinance this mortgage on residential terms at 4.02%, a saving of over $20,000 p.a.

The initial option from the bank was perhaps the obvious solution, but by looking at this situation through a wide focus lens, we were able to provide a better outcome for this client.

Call Ryan on 021 662 205 or email on ryan@mfas.co.nz