ACCC decision has implications for financial planning
The competition regulator, the Australian Competition and Consumer Commission (ACCC), has issued a decision regarding membership of industry organisations which may have implications for groups such as the Financial Planning Association and the Association of Financial Advisers.
The ACCC late last week decided to allow a continuation of a situation under which mortgage brokers working for particular lending businesses are required to be members of the Mortgage Finance Association of Australia (MFAA).
The regulator said it had decided to "allow the protection from legal action for the arrangements to continue".
Commenting on the regulator's decision, ACCC chairman Rod Sims said the ACCC believed the arrangements continued to deliver benefits to the public, notwithstanding the commencement of a national regulatory regime for the credit industry in 2010.
He pointed out that the MFAA's membership requirements imposed higher educational standards and certain other professional requirements on its members than the regulatory regime.
"The ACCC considers requiring MFAA membership is likely to assist those lending businesses to ensure that their brokers are of a consistently high standard and to meet their compliance obligations under the Act," Sims said.
The ACCC's formal statement said that while it acknowledged requiring MFAA membership restricted choice of professional association for the broker - thereby limiting competition from other similar professional associations - the small number of brokers involved meant any public detriment was minimal.
"Further, the MFAA membership requirement is only imposed by two industry participants," it said. "There are a large number of other businesses that individual brokers can work for if they disagree with the MFAA membership requirement."
The ACCC initiated a review of the arrangements last year after receiving a complaint alleging anti-competitive behaviour.
AUTHOR
Staff Writer
Recommended for you
With the highest number of candidates in a year sitting the latest financial advice exam, a surge of new entrants are expected in the coming weeks, according to Wealth Data.
AMP has launched a range of five diversified index managed portfolios on its North investment platform, targeting a younger client demographic.
An NSW adviser, who advised over 120 clients after falsifying her financial advice exam results, has been permanently banned by ASIC.
ASIC has released the results from the latest financial adviser exam, the first to be run since changes to its structure earlier this year.
