Financial advisers would find it difficult to also advise on credit and allowing them to service clients on both fronts is unnecessary, the Commonwealth Bank has told the Productivity Commission.
Speaking during a public hearing with the Productivity Commission, Commonwealth Bank general manager of retail sales and services Angus Sullivan said the credit market did not need more people providing mortgages and that the Productivity Commission’s proposal to change the licensing regime so advisers can provide credit services under an AFSL isn’t needed.
“With 16,000 brokers out in the marketplace, we’re certainly not in a position where we need more people to serve Australians well in meeting their mortgage needs in terms of broker comparison,” Mr Sullivan said.
“For me it's certainly not a quantity issue.”
Mr Sullivan added that it would also be difficult for anyone to appropriately provide both financial advice and mortgage services.
“It would be quite hard, in my practical experience, to find an individual who would be able to easily get across both domains,” they said.
However, Mr Sullivan subsequently said he did "not have a particularly strong view one way or the other" and that the proposal to "put a professionally trained wealth manager into a sphere where professional training is less emphasised" would not add risk for consumers.
He went on to say that there may be "more direct ways" of dealing with quality of mortgage broking services than the PC proposal.
Speaking before the Productivity Commission last week, consumer advocacy group Choice said it would support a change to the licensing regime so long as existing regulation requiring financial advisers to act in their clients’ best interests is extended to the provision of credit services.
“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,” said Choice chief executive Alan Kirkland.
Clarification: A previous version of this article suggested that CBA "rejected" the Productivity Commission proposal to allow licensed financial advisers to provide credit advice without an Australian Credit Licence. The article and headline have subsequently been amended to introduce additional quotes from the transcript and clarify the bank's nuanced, if somewhat contradictory, stance on the proposal.
The big four bank has estimated it will be paying around $8 million to around 8,...
FASEA has conceded that its code of ethics is difficult for compliance managers ...
The majority of claims made under retail life insurance policies are now able to...