Personal finance feature: Getting in bed with the... | Stuff.co.nz

New Zealanders like to get it on. Surveys conducted by condom manufacturer Durex inform us our ladies are the most promiscuous in the world, and the blokes aren't far behind.

But when it comes to getting in bed with the banks, we're not so keen to play the field.

While Durex reckons the average Kiwi has a reported 16-20 sexual dalliances over their lifetime (allowing for a wee bit of exaggeration, of course), some will spend their whole lives remaining faithful to the same old banker.

There's no shortage of enthusiastic partners out there- the lecherous lenders drool at the thought of attracting new customers.

Banks don't kiss and tell though, so we don't know exactly how many people do switch between them each year.

But the latest Roy Morgan survey suggests that one in 10 people switched last year, almost double the 5.9 per cent low in April.

Roy Morgan general manager Pip Elliott says most customers will only change banks when it comes to a "moment of truth", like a new loan or mortgage.

The moment that triggered our most recent bout of friskiness was the merger of the ANZ and National Bank brands, as itinerant customers looked for a new home.

Now that the process for bank swapping has become easier than ever, the challenge is to maintain that momentum.

The benefit of bank-swapping might be to escape an abusive relationship, find a bank that really satisfies your needs, or simply get more bang for your buck.

Most importantly, it keeps competition alive and well and pushes prices down for everyone.

Here's how to do it.

Banks are easy

Are you lacking in charisma? A bit whiffy? Have a face that only a mother could love? The banks don't care. Somehow they manage to look past all those surface imperfections, and focus on your true beauty - that is, the contents of your wallet.

There's little risk of rejection, with lenders always looking to get involved in quality new relationships.

But they're also reluctant to let go when you want to end it.?

Kiwibank is seen as the bank of choice when customers fall out with their Australian bankers, says communications manager Bruce Thompson.

"Our chief executive has always said- people don't so much come to banks, as leave banks."

Providing a shoulder to cry on has seen the little green bank grow significantly as it benefits from the churn.

So it's unsurprising that it was Kiwibank which campaigned to make the banks agree to make it easier to switch customers between themselves a few years ago.

Under threat of legislation, they agreed, and now the system is universal across the industry.?

Now all you have to do is approach your new lender, and let it do all the work. It will talk to your ex and transfer across details of your accounts, automatic payments and direct debits.

Messy break-ups

A divorce battle dragged through the courts can be a financial nightmare as well as a major source of stress, and breaking up with your bank can have its pitfalls too.

If you don't have a home loan, the cost of switching banks is likely to be minimal or non-existent.

It usually costs a few bucks to set up direct debits and automatic payments, but banks will waive the fees when you're fleeing into their arms.

Massey University banking expert Claire Matthews, who did her PhD on bank switching, says mortgages are a bit trickier to transfer.

"There's going to be a cost of getting a mortgage to the first bank discharged, and a cost of getting a mortgage to the new bank registered."

That means legal fees. On top of that, you'll be hit with break penalties if you try and call off a fixed-term mortgage before it falls due.

Matthews says these break fees can run into the tens of thousands, depending on when you fixed and at what interest rate.

Feeling trapped? There's hope yet.

Sugar daddies

If you're worried about the cost of breaking up with your bank, the logical thing to do is to find yourself a sugar daddy.

Some banks will welcome you into their arms and lavish you with gifts of money, big screen TVs and tablet computers - seriously.?

If you're bringing over a good chunk of business, the banks regularly promote specials offering cash back and a contribution to legal costs.

"Even if they're not publicly offering those, you should be able to negotiate with the bank," says Matthews.

"Because of the competitive market, in most cases I would expect the bank to agree to that."

ASB has offered flashy tech gadgets to woo new mortgage customers in recent months.

And at the height of mortgage mania discounting last year, some banks even reportedly offered to help pay people's break fees.

"If your break fees are only a couple of thousand, then yes, they may make a contribution towards that," says Matthews.

If they're tens of thousands, don't get your hopes up. But at the very least, it doesn't hurt to ask.

Taking it slow

Moving in with your new crush straight after the first date would be a little odd.

It takes a bit of time to build trust - and keep a wary eye out for any potential warning signs.?

While the bank-swap system has been around for years, the uptake has been pretty slow.

"Easy-switch is total commitment," says Kiwibank's Bruce Thompson.

He reckons not everyone wants to jump feet first into a new relationship. Some people prefer to test the waters first, and then bring all their banking across in drips and drabs.

"People would for example bring over a savings account or transactions account, and then their mortgage."

The reluctance to transfer the whole lot across at once means people often have a range of banking relationships on the boil.

Polyamory

Some people - the Tiger Woods and Don Juans of this world - just weren't meant for monogamy.

In banking, there can be good reason to spread your custom widely. It allows you to pick-and-mix the best value offerings across various financial products, like transaction and savings accounts, home loans, insurance and Kiwisaver.

The author, for example, has relationships with three of the main banks and is eyeing up a cute-looking number four to add to the harem.

Of course, this isn't always possible or desirable. Getting a mortgage often requires your salary to be paid into an account with the same bank.

And Matthews says you might also get better value by having all your banking under one roof.
They'll likely offer you better deals and rates to secure your business.

"From the bank's perspective, it is much better to keep customers than to find new customers."

Relationship counselling

If you're really brassed off, you can kick your bank to the curb without so much as a backwards glance.

They'll come home to find you've moved out of the apartment and taken your prized CD collection with you.

But it's definitely worth talking it through before cutting them loose.?

They may match the better offer, or make an attempt to resolve whatever problems had sent you on the prowl for a new banker.

At the same time, don't be pressured into staying in an unsatisfactory relationship. You don't owe your bank anything - it exists only to make money from you.

It's vital that consumers keep switching so that banks don't get complacent.

"It's when you've got competition that you're going to get better prices," says Matthews.

This is a call to action for prudish New Zealanders reluctant to finally act on their repressed wanton urges.

You don't need to throw your keys in a bowl. But you do need to check out the competition, ask for better rates or services, and make sure your bank always leaves you satisfied.

- ? Fairfax NZ News

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Source: http://www.stuff.co.nz/business/money/8474863/Getting-in-bed-with-the-banks

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