The country's biggest lender wrote to advisers on October 17 to state it would "only deal with intermediaries who are lawfully able to provide regulated financial advice to retail clients either under their own FAP licence, or under another entity’s FAP licence".
The bank's position will come as a boost to adviser businesses keen on holding their own FAP licence, rather than working underneath an aggregator group's.
It is understood the lender is happy for dealer groups to have no legal or civil liability for member businesses that hold their own FAP licence.
The system will allow adviser FAPs to operate underneath a group FAP, with the group holding an agreement with the lender.
In the letter to advisers, ANZ said it expected FAP licence holders to "meet industry standards" and show "robust advice and governance processes". The lender wants "appropriate digital security measures and quality assurance controls" to ensure the needs of its customers will be met.
As ANZ prepares for the new regime, it will also review its current Mortgage Adviser Agreement, to ensure it is "fit for FSLAA's purposes", the letter said.
An ANZ spokesman confirmed the details of the letter to TMM Online.
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ANZ been the largest lender in the country has just signalled to the industry that Mortgage advisers who are deemed fit by the FMA to hold their own licence and become a FAP will be able to have direct lending agreements with them. ANZ confirmed this to me yesterday. This is a logical & well thought out decision made by ANZ. ANZ understands that the adviser is the one giving the advice to the customer, NOT the dealer group the adviser belongs to.
Dealer groups going forward are clearly going to have to demonstrate value to their members beyond traditionally just enabling them to hold relationships with the various banks & insurers. The insurers have already signalled that they will continue to allow direct agreements with insurance advisers as long as they have their own FAP. This is yet another example of the increasing obsolescence of dealer groups when advisers are able to hold direct relationships with providers.
Of course many advisers have now tied themselves to their group by them been completely dependent on their cloud based CRMs to operate their businesses. Reading ANZ’s comments about them wanting FAPs to have “appropriate digital security measures” going forward I can’t help but think that the banks are now finally waking up to the privacy implications of mortgage advisers using group owned cloud based CRMs especially those groups with overseas owners. Are all mortgage advisers who are currently using a group owned CRM telling their clients about the third parties overseas who are in receipt of their personal and financial information?
I said banks earlier because with ANZ been the largest lender in the country and thus having the biggest market share of business from mortgage advisers the likes of ASB and Westpac will now inevitably follow ANZ’s lead. The smaller lenders will join the herd also. This just leaves BNZ then who now have to decide whether they want to alienate themselves with mortgage advisers and insist that we all have to operate under a dealer group’s FAP just to be able to send them business.
Well done ANZ!