Kathy Bowler
Research commissioned by the accounting body CPA Australia has confirmed that consumers need good advice when they are shopping around for a mortgage.
The problem is the research also suggests that many people are receiving that advice from mortgage brokers.
CPA Australia financial planning policy adviser Kath Bowler said brokers were playing an increasingly important role in the mortgage selection process, particularly with respect to younger consumers.
“With younger people choosing non-traditional lenders and advice being rated so highly, it is critical that standards are in place to ensure consumers are receiving advice appropriate to their needs,” Bowler said.
She said that while CPA Australia noted that some states such as Western Australia had codes of conduct for mortgage brokers, there were no consistent requirements.
“The Government has put a lot of emphasis into consumer protection through the Financial Services Reform Act, but mortgages are outside the regime,” she said.
“There is a concern that brokers could be motivated to loan more because they are often remunerated based on the amount borrowed,” Bowler said.
“Disclosure of remuneration would help consumers be aware of any incentives brokers have when providing advice.”
She said that disclosure had been a stimulus to improve standards in the financial planning industry.
