Lateral Partners thrives by redefining mid-sized brokerage success
As regulation reshapes New Zealand’s mortgage industry, some firms are finding it harder to keep pace.
For Ben Pauley (pictured), director and adviser at Lateral Partners, the answer hasn’t been chasing scale – it’s been sharpening focus. By pivoting toward commercial and development lending, his firm has turned structural challenges into strategic advantage.
Breaking the brokerage glass ceiling
In a market where mortgage brokerages are either small boutique firms or national powerhouses, Pauley believes the middle ground is the hardest place to be.
“The level of regulation now I believe creates a bit of a glass ceiling in the brokerage industry where it suits either small one- to three-man advisory groups or larger market players,” he says. “Navigating that space with a mid-sized firm I think is exceptionally difficult given the overheads and time involved as you look to scale to that next step.”
That insight led to a bold strategic move.
“As a business we made a strategic decision this year to sell our regulated advice business and focus purely on commercial and development lending,” Pauley says. “This has been a great decision so far and allowed us to become much more streamlined and focused on giving great advice in a really complex market.”
It’s a decision that’s redefining how mid-sized brokerages can succeed – by narrowing focus rather than spreading thin.
From bank to broker: Building a commercial edge
Pauley’s journey into broking began in 2018 when he joined Squirrel Mortgages, leaving behind the corporate security of ASB.
“I became a mortgage adviser in 2018 with Squirrel Mortgages,” he says. “I was head hunted at the time from ASB to come across and set up their commercial mortgage broker division. It was a great opportunity for me to leave the comfort of the bank system and move out into a role that rewarded me more for hard work and success.”
The leap was a success.
“That role was very successful over a two-year period and prompted the establishment of Lateral Partners in 2020 (right before COVID). Since then, we haven’t really looked back,” Pauley says.
Scaling smart in a regulated market
While many advisers aim to grow by volume, Pauley’s approach has been about refining value. He has seen how the industry’s rapid professionalisation has both elevated standards and raised barriers.
“The development of some at scale mortgage broker firms in the last four–to–five years has been great to see. This has really been something necessary given the increase in market regulation, however,” he says.
For mid-sized brokerages, however, he argues the cost and complexity of compliance can stifle scalability. Lateral Partners’ pivot toward commercial and development lending reflects a new kind of agility – one where expertise, not size, drives competitiveness.
A surge in lender competition
Pauley has also witnessed a dramatic expansion of funding options.
“Another great development we have seen in the last five years or so is the proliferation of lenders for unregulated debts,” he says. “When we first set up Lateral Partners, there was perhaps 25 to 30 funders we could call on. Now we have a list of more than 150 that we can call on for different deals.”
Pauley cautions, however, that more choice doesn’t always mean better outcomes.
“Not all lenders are people we engage with, however, and it does pay to understand who you are borrowing from! The increase in competition, however, has led to better rates and terms for clients enabling us to better serve their needs,” he says.
Raising standards in commercial lending
As regulation continues to reshape retail lending, Pauley believes the commercial space needs greater oversight – without stifling flexibility.
“I think a great challenge faced in the advice industry is the lack of regulation, within reason, for commercial lending,” he says. “We often come across clients who have had bad advice previously in this space and given it is an unregulated area there is no means to manage this.
“Development and commercial lending is niche and complex with many different means of pricing, loan terms and significantly more funders in the market. Navigating that space to ensure your client gets the best outcome for them can be difficult, particularly if you aren’t familiar with development lending as a core part of your business. I personally don’t think I am the right person to get someone a home loan, but I am certainly a good bet if you have a development that needs funding.”
Pauley supports industry recognition for specialists.
“I think some regulation or recognition of qualifications in this space would reduce the amount of parties who arrange debt for clients without a great understanding of what they are doing greatly improving the outcome for the average borrower,” he says.
Pauley stops short of calling for heavy-handed rules.
“I am not sure I would necessarily campaign for a very high bar of regulation but rather, perhaps, an industry acknowledgement or tick that is difficult to obtain,” he says. “I am a believer in free markets, however, it is far too easy for inexperienced brokers to secure debt solutions that do not meet their clients needs but are obtained in effect by ignorance.”
Lessons in leadership and resilience
Behind Lateral Partners’ strategic clarity is Pauley’s own experience in navigating adversity.
“Early on with Lateral Partners, I had a business dispute which consumed a lot of my time over a 12-month period,” he says. “Perhaps the greatest lesson I learned through that was the importance of surrounding yourself with good people and qualified advice. Having those people around me during that period enabled me to manage the many things that were going on at the time and focus my attention where it was needed without the wheels absolutely falling off.”
Advice for new advisers
Pauley’s advice for those entering the industry reflects the patience and persistence that shaped his own journey.
“Be patient,” he says. “We have people that transition into advice in our business, and I have seen it with many in the industry and the biggest challenge is remaining patient. It takes a lot of time to learn the tools of the trade and even longer to build your networks and the trust of referral partners. Being patient and accepting that there may be fallow periods early on will stand you in good stead to succeed later.”
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