The banks aren't saying anything publicly about the PAA's letter to members, but they are quietly seething about what has happened. And fair enough, too.
The feedback we are getting is that the banks are highly upset that the PAA is accusing them of trying to dismantle the advisory network and undermining advisers.
Banks do want a partnership with mortgage advisers. There is no doubt third-party distribution is an important channel for them to get their products to customers.
There will always be tensions and, as we have seen many times before the relationship ebbs and flows. In this challenging lending environment with credit rationing and multiple lending restrictions it is little surprise there are changes in how they operate in the various distribution channels.
The biggest issue here is the way the PAA Board have handled this. The allegations appear never to have been aired with the banks before the email was sent out. Secondly, banks still are unclear what the issue is that got the PAA Board so wound up. Some say they still don't know, and it's nearly a fortnight since the email was sent.
As I mentioned last week, the email was targeted at one bank, but ended up tarring all the banks.
There is a role for professional associations to stand up for their members, but there is also a right way to go about doing it. In this case it seems little has been done in a professional manner.
While banks are reluctant to comment on the record about the email, they have a right to feel aggrieved. Indeed, they could react swiftly and quite forcefully it they so choose. It seems the only immediate consequences are that ANZ has withdrawn its sponsorship from the upcoming National Advisers Conference. (However, ANZ Investments is there as a bronze sponsor now and its life business, OnePath, remains unchanged).
Earlier story: PAA slams banks for undermining advisers