ComCom report backs calls from mortgage adviser peak body for banks to improve

The peak body representing finance and mortgage advisers has applauded the turnaround by the Commerce Commission in its final report after it labelled the draft report released five months ago as “baffling and embarrassing”.

NZ country manager for the Finance and Mortgage Advisers Association of New Zealand (FAMNZ) Leigh Hodgetts, who in March called the draft report a “product of the commission’s lack of engagement with our sector”, said she had since met several times with ComCom to help them better understand the way advisers work.

“It is pleasing to see that in this report the commissioner stated that mortgage advisers can add considerable value to borrowers,” she said.

In fact she said much of this report supported many of the issues FAMNZ has been calling for, including the need for lenders to better support the adviser channel.

“Only last month we asked banks to improve technology and systems so that advisers can serve consumers better, and this report echoes our call.”

She also backed the recommendations for clawbacks to be pro-rated over a period to ensure fairer outcomes for mortgage advisers and consumers, saying “this is what we have advocated for.”

Ms Hodgetts said that after much engagement with the commission, “it’s clear a better understanding has been gained as to how mortgage advisers support pro-competition in the market and provide more choice and advice to consumers when it comes to borrowing money.”

However she pointed out that there are still issues about which the commission is confused, including how mortgage advisers come to the final recommendation for borrowers.

“The statement that ‘mortgage advisers should also put more emphasis on price’, is in some ways irresponsible, as every borrower is different.

“While the interest rate is important, there are many other factors around individual circumstances that must be considered when a consumer takes a loan.”

She said FAMNZ will continue to educate the commission through ongoing engagement.

Ms Hodgetts has called on the banks to act on the report.

“The ball is now in their court and advisers will continue to put the interests of consumers first and play an important role in assisting Kiwis with mortgages and other loans.”