Mortgage Choice planners not impacted by grandfathering changes
Publicly-listed mortgage broking and financial advice business, Mortgage Choice, believes its planners will emerge substantially unscathed from the removal of grandfathered commissions from 1 January, 2021, but has acknowledged key impacts on its mortgage business.
In a release to the Australian Securities Exchange (ASX), Mortgage Choice chief executive, Susan Mitchell said the Royal Commission’s recommendations regarding broker remuneration needed to be thought through carefully.
“The proposed changes could have a large impact on the mortgage broking industry and therefore competition within the home lending sector,” she said. “Ultimately they could give more pricing power to the major banks which would lead to less choice, less access to credit and higher interest rates for consumers.”
Mitchell noted that the Government had proposed a ban on trailing commissions on new loans from 1 July, 2020 while trails on existing loans would remain unaffected. However, she also noted that the Government proposed a further review of broker remuneration in three years’ time.
“These are potentially significant changes which require careful consideration to ensure they do not have counter-productive consequences for the home loan market,” she said.
Mitchell said that where grandfathered commissions and financial advice were concerned, the impacts would be minimal for the Mortgage Choice Financial Planning business as the model had no reliance on grandfathered commissions.
Recommended for you
The popularity of ETFs, which are approaching $200 billion in Australia, is a potential threat to the advice landscape if consumers opt to invest directly, according to this senior partner.
A former AMP financial adviser has urged advisers in the BOLR class action against AMP to object to the “unfair and unreasonable” $100 million settlement sum as the objection deadline approaches on 22 May.
Two Victoria-based financial advice practices have merged and rebranded as Forbes Fava Saville Financial Planning, as the firm realises the benefits of added scale.
The Financial Services and Credit Panel has made its latest ruling over a case involving an incorrect Statement of Advice.
