FPA urges personal best interest duty for mortgage brokers

13 November 2019

Mortgage brokers should be subject to a personal best interest duty towards their clients in the same fashion as financial advisers, according to the Financial Planning Association (FPA).

In a submission filed with the Federal Treasury responding to legislation covering mortgage broker remuneration, the FPA said it believed the best interest duty needed to reside with the mortgage broker rather than the Australian Credit Licensee.

In doing so, the FPA said this would bring the treatment of mortgage brokers into line with that applying to financial advisers and under the Tax Practitioners Board Code of Professional Conduct in respect of tax (financial) advisers.

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“It is appropriate that these best interest duties are set as broad statements of principle and that they apply to financial services professionals as a personal duty,” the FPA submission said. “While the drafting of the various duties is similar, their operation in practice is often governed by additional guidance from regulators on how to comply with the duty. It is at this stage that it is vital that regulators take a consistent approach to the extent that it is possible.”

“To be consistent it is also important that the proposed best interest duty for mortgage brokers is crafted as a personal duty on the broker, rather than only as a duty on the Australian Credit Licensee. Complying with materially different regulatory standards adds cost to financial services which is ultimately borne by consumers through higher prices,” the FPA submission said.

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While we're at it, how about a best interests duty for accountants?

Accountants give enormous amounts of super and investment advice which is completely conflicted and inappropriate. Particularly in relation to SMSFs and investment properties. Lots of accountants also try to hide behind the "I didn't actually give advice I just implemented what the client asked for" excuse. In most cases it's a lie, but even when it's true it is still a fundamental failure to act in clients' best interests.

Accountants claim they don't need to be regulated because they are "trusted". But that is all the more reason why accountants should be regulated. Consumers' misplaced trust in accountants has led them to accept accountants' bad advice without question.

Some accountants even claim they are beyond reproach because they charge fees for service. But surely all the conflicted, inappropriate fee for service advice given by accountants is just further proof that all payment methods are conflicted. The only way to properly protect consumers is via a best interests duty.

Wouldn't it just be awesome common sense for the FPA just to fix its own issues and keep their nose out of other people's businesses?

I'm a planner not a broker and if TPB get their way regarding not needing FPA membership, especially if we all have to subscribe to an external FASEA monitoring body anyway, then my CFP membership will be resigned.

Why are the FPA even commenting on the Mortgage Broking Industry? They can't even represent Financial Planners effectively! Is their next "innovation" to make a Tinder like app for Mortgage Brokers? They'll have to find a way to pay Dante's ever increasing salary!

Wow, hasn't it all turned around. Everyone within the financial services industry tittle tattling on everyone and everything. I think FPA just needs to grow up, get your own house in order before opening your mouth.

The public is sick and tired of it all. Also not much use arguing with idiots as they bring you down to a level and beat you with experience

Good on you FPA, the pollies dont listen to you, you have no public support, now you want to fight with our main referral partners . You are dead set numbnuts.

Do you think someone at the FPA is a bit unhappy about how effective the mortgage broker associations were recently on standing up for their members compared with the FPA? Typical FPA, don't try and learn from them, just try and mess up their businesses instead.

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