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
Licensee Centrepoint Alliance has completed the acquisition of Brighter Super’s annual review service advice book, via Financial Advice Matters.
ASIC has launched court proceedings against the responsible entity of three managed investment schemes with around 600 retail investors.
There is a gap in the market for Australian advisers to help individuals with succession planning as the country has been noted by Capital Group for being overly “hands off” around inheritances.
ASIC has cancelled the AFSL of an advice firm associated with Shield and First Guardian collapses, and permanently banned its responsible manager.
