FAMNZ meeting with new minister positive but campaign far from over

The Finance and Mortgage Advisers Association of New Zealand (FAMNZ) says a meeting with new minister of commerce and consumer affairs Scott Simpson, which included discussions about recommendations from the Commerce Commission, was “very constructive.”

FAMNZ country manager Leigh Hodgetts said the minister was receptive and seemed to understand that ComCom’s recommendation for mortgage advisers to provide three actual offers for each application would create chaos for consumers, advisers and lenders.

However while she is hopeful the meeting will lead to better outcomes, she said the campaign to protect the industry is ongoing and repeated calls for industry support.

“The bigger question is why we are seeing such detrimental recommendations at all.”

“Sadly there is a perception that ComCom and others across government don’t understand the important role mortgage advisers already play in driving competition, and maybe even don’t try to understand.

“We’d like to believe this is not the case which is why we are continuing to work with the commission and assist them.”

In a stark message to mortgage advisers, she warned, “there are many advisers across New Zealand who may be unaware that right now, our industry – and their business – is at risk.

Ms Hodgetts said FAMNZ has been talking to lenders, aggregators, the FMA and members for the past 12 months and while there has been progress, too many mortgage advisers don’t see the gravity of what is happening.

“If these recommendations are forced upon us – and remember this is the threat provided in writing – we will see costs blowing up for consumers as advisers juggle multiple applications and multiple credit checks, while lenders will be forced into paying for extra valuations and more staff.

“Application times will go to 30 days plus and consumers will potentially be pushed directly to the bank for quicker approval times.”

Her message to advisers is to, “Get on board before it’s too late and let’s stand together on this.”

Ms Hodgetts said FAMNZ is presenting the commission with a solution and called on the industry to back the plan. 

“Right now mortgage advisers can and should be presenting customers with a comparison of three lenders ‘where possible’.

“This should include the rates, approval amount, repayment, cashback, and other benefits and policy nuances.”

She vowed to keep going until a successful outcome is achieved, and asked mortgage advisers who want more information to contact the association.