Phil Anderson, Association of Financial Advisers (AFA) general manager policy and professionalism, defended the industry’s response to the Royal Commission, saying that comparisons to the pushback by mortgage brokers were not as significant as it seemed.
“We get a lot of people contacting us and asking ‘why can’t you do what the mortgage brokers did, run a marketing campaign and an advertising campaign that convinces them to change what he’s [Hayne] recommended’,” Anderson said at the AFA Roadshow in Sydney.
One of the Royal Commission recommendations from Commissioner Kenneth Hayne was that trail commissions on new loans should cease from a certain point.
The government originally set a 1 July, 2020, date and the decision would later be deferred for a three-year period under pressure of the campaign.
“The mortgage brokers ran a very effective campaign, a lot of advertising on TV and billboards, and worked both sides of politics to get change,” Anderson said.
“It was a big win, but it was based on a very strong argument: ‘this will hand competitive advantage back to the banks and disadvantage the Australian community’.”
Anderson said that wasn’t the end of the story and the reality was mortgage brokers had not escaped the wrath of the Royal Commission.
“They have a best interest journey that starts on 1 July, 2020, which was legislated late last year,” Anderson said.
“Financial advisers have a safe harbour, you have seven steps and if you follow them you are protected, mortgage brokers don’t have that.”
“Mortgage brokers don’t have a safe harbour, they don’t have any guidance yet, they have a new best interest duty that starts on the first of July and many of them have no idea how they’re going to comply with it.”
Comments
Is this an early April 1st joke?
Under the FASEA Code financial advisers don't have a safe harbour either. We are yet to see how the FASEA Code will be monitored and enforced, as it will be done by the new financial advisers disciplinary body. But if that body has powers that override the current law, then it is likely to render the safe harbour provisions of the Corps Act completely moot.
At least mortgage brokers only have to comply with the law. They won't have to do deal with a quasi legal body that is likely to have draconian powers, and be controlled by adviser hating left wing activists masquerading as "consumer representatives".
What garbage and petty excuse making from the AFA! The mortgage broker bodies were very successful in making sure commissions stayed for the benefit of customers and their members.
Compare that to the pathetic response by the AFA and FPA to the LIF and look at the disastrous outcomes its created and still no push back from the AFA or FPA.
The difference between the mortgage broker bodies is that they are not funded by the banks. The AFA and FPA are funded by the FSC and members and are simply too conflicted to fight for whats right.
Except Brokers don't have a FASEA code, that is unworkable, to contend with.
How can an adviser be better off when a mortgage broker is not required to have a relevant or related degree and the rest to stay in the job?
Add new comment