Mortgage advisers aim to “educate” ComCom and want it to apologise

The mortgage advisory industry is putting in a concerted effort to educate the Commerce Commission that it's views of their role and motivations is plain wrong.

Sarah Curtis of Sarah Curtis Mortgages & Insurance has managed to elicit an apology on LinkedIn from ComCom chair John Small for accusing mortgage advisers of being “unduly influenced” by the commissions they are paid by lenders.

The Finance and Mortgage Advisers Association of New Zealand (FAMNZ), is also demanding a public apology from Small after meeting with the ComCom.

When releasing its draft report on competition in banking services on March 21, ComCom's Small told journalists that while he didn't think brokers are ignoring customers' needs, he is concerned about inadequate disclosure of the conflicts of interest they face.

“We know that any given broker will work through an aggregator platform and will have access to some banks but not all banks. I'm not sure if you went to a mortgage broker that they would tell you that,” Small said.

“From the broker's point of view, they will get different amounts of money from different banks. I'm not sure when you go to a mortgage broker that they would declare that to you,” he said.

Curtis immediately took to LinkedIn: “What a total & complete load of bull,” she wrote

The ComCom had displayed “ a complete lack of understanding” about what advisers actually do.

“There are so many holes in this report that it's not even excusable and there needs to be some accountability around the narrative that we advisors are what is wrong with the industry,” Curtis wrote.

“This is incredibly damaging to the strong reputations and relationships we build,” she said, adding that it was obvious that Small “has absolutely no idea what is going on in our industry.”

Small responded to Curtis on LinkedIn: “I unreservedly apologise for all errors of fact and interpretation in our report and in my verbal comments.”

He added that he looked forward to engaging with her and other mortgage advisors directly “so that our final report on competition in personal banking services reflects a fully informed view of the mortgage advisor sector.”

FAMNZ country manager Leigh Hodgetts says her meeting with ComCom was “beneficial” but that its report “lacked understanding of how mortgage advisers operate and contained a lot of assumptions.”

Hodgetts says the problems with the report reflect ComCom's lack of engagement with advisers as well as with the Financial Markets Authority.

FAMNZ has only just opened its membership to NZ mortgage advisers, but is keen to work with ComCom “to rectify the relationship and build trust.”

FAMNZ is the newly established arm of the Australian organisation which aims to build membership of NZ advisers.

TMMO has tried without success to elicit a response to ComCom's draft report since it was published on March 21 from Financial Advice NZ, which is supposed to represent mortgage advisers in NZ, but nothing has been forthcoming to date.

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