Speaking at the Productivity Commission’s (PC) public hearing on competition in the financial system, Choice chief executive Alan Kirkland said the PC’s proposal that advisers should be able to provide credit facilities “has merit”, assuming the best interests duty still applies.
“If that duty would continue to apply and they would be able to provide mortgage advice without requiring a separate licence then we think there is merit in considering that,” he said.
Mr Kirkland said Choice would also like a similar best interests duty to be applied to mortgage brokers, adding that the education and regulation requirements placed on advisers mean “it would still be easier to be a mortgage broker with less obligations than it would be to become a financial adviser”.
“We would like to see the application of best interests duty to all mortgage brokers, not just those who are part of vertically-integrated models,” he said.
“But if that were the case and you also allowed financial advisers to provide mortgage advice without being separately licensed then there would still be a lower barrier to entry to be a mortgage broker.”
Earlier in February, the Finance Brokers Association of Australia condemned the PC’s proposal as being “ludicrous”, arguing the commission “failed to understand the reasons why consumers engage brokers” in the first place.
At least the finance brokers Association are sticking up for its members unlike the associations claiming to represent advisers.