FAMNZ keen to continue engagement with FMA after CEO comments

The Finance and Mortgage Advisers Association of New Zealand (FAMNZ) has welcomed the opportunity to continue to engage with the Financial Markets Authority (FMA) following comments from FMA chief executive Samantha Barrass.

Ms Barrass was reported as telling the Financial Services Council NZ conference that the regulator would respond to the Commerce Commission’s banking report and the commission’s concerns about transparency in mortgage advice.

FAMNZ country manager Leigh Hodgetts said the association looks forward to showcasing what advisers bring to the market and what is needed from the banking sector that will bring greater benefit to consumers.

“Because we are New Zealand’s representative on the International Mortgage Brokers Federation, we can speak to the way the third party channel operates across the world and what is needed in New Zealand to ensure that consumers here benefit,” she said.

However she pointed out that the Commerce Commission report, which used the Australian model as an example, displayed a lack of understanding of New Zealand regulations around mortgage advisers.

“Australian mortgage ‘brokers’ provide various offers to customers because they cannot give advice; whereas New Zealand mortgage advisers operate under a license to provide financial advice to retail customers.

“We consider several lenders and their products to arrive at a recommendation, and while in many cases the adviser may provide various options, in some cases, there may be only one,” she explained.

Ms Hodgetts said it was also unrealistic for advisers to list all lenders “not on their panel” as there is such a wide variety of lenders for different purposes.

“Again the Commerce Commission doesn’t really understand how the sector works although we commend them for spending time to better educate themselves recently and look forward to further dialogue.”

She said mortgage advisers already drive competition as, “without them, a few large banks would control almost all of the market which would be a terrible result for consumers and competition.

“Banks are of course unable to advise consumers of what other banks are offering.

“Only mortgage advisers act in the best interests of the consumer and their individual circumstances, and do the work to provide the best outcome for customers.”