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Disclose “incentives” and “perks”: Southern Cross CEO

The Ministry of Business, Innovation and Employment's proposals to make advisers publicly disclose commission have proven unpopular, yet one Kiwi lender would like to see advisers go even further.

Monday, July 2nd 2018, 3:03PM

by Dan Dunkley

Luke Jackson, CEO of peer-to-peer lender Southern Cross, believes advisers should be open about the “incentives” or “perks” they receive from lenders. Jackson says there is a “reasonable argument” advisers are “clouded by the relationships they have”, as well as free rugby tickets or overseas trips laid on by favoured lenders.

Jackson claims many advisers are “influenced by personal sweeteners”. He adds: “The question that needs to be asked is always ‘is this in the best interests of the borrower? If incentives or perks are involved, then best judgement can be clouded.”

Jackson, who supports the MBIE proposals, believes advisers are often under pressure to refer certain volumes of business to lenders to maintain relationships. He adds: “Some banks expect a certain level of business from an adviser, or that adviser is struck off their books – how is that fair to the borrower or adviser?”

Jackson has expressed concerns about how disclosure of commission charges would be enforced. He argues adviser groups could be in the best position to enforce the rules, if they come into effect. “They already provide various forms of governance for advisers to operate within. Disclosure may be an extension of that.”

The comments contrast with opinions held by advisers including Hamish Patel of Mortgagesonline.co.nz. Patel believes public disclosure of commission would put the industry at a disadvantage, as lenders would not be forced to reveal their own bonus systems.

MBIE is assessing feedback on the commission proposals, which were introduced as part of the review into new financial advice laws. The industry had a May 25 deadline to respond.

Tags: MoBIE Peer to Peer Lending

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Lender Flt 1yr 2yr 3yr
ANZ 5.79 4.55 4.79 4.99
ANZ Special - 4.05 4.29 4.49
ASB Bank 5.80 4.44 4.69 4.89
ASB Bank Special - 3.95 4.29 4.49
BNZ - Mortgage One 6.50 - - -
BNZ - Rapid Repay 5.95 - - -
BNZ - Special - 4.10 4.29 4.49
BNZ - Std, FlyBuys 5.90 4.69 4.79 4.99
BNZ - TotalMoney 5.90 - - -
Credit Union Auckland 6.70 - - -
Credit Union Baywide 6.15 5.20 5.25 -
Lender Flt 1yr 2yr 3yr
Credit Union North 6.45 - - -
Credit Union South 6.45 - - -
Finance Direct - - - -
First Credit Union 5.85 - - -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.70 4.85 -
Housing NZ Corp 5.80 4.69 4.79 4.79
HSBC Premier 5.89 3.99 4.19 4.69
HSBC Premier LVR > 80% - 3.79 - -
HSBC Special - - - -
Lender Flt 1yr 2yr 3yr
ICBC 5.80 4.59 4.69 5.09
Kiwibank 5.80 4.55 4.69 4.99
Kiwibank - Capped - - - -
Kiwibank - Offset 5.80 - - -
Kiwibank Special - 4.05 4.29 4.49
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 6.10 5.10 5.45 -
Resimac 5.30 4.86 4.94 5.30
RESIMAC Special - - - -
SBS Bank 5.89 4.85 5.05 4.49
Lender Flt 1yr 2yr 3yr
SBS Bank Special - 4.19 3.95 4.49
Sovereign 5.90 4.45 4.69 4.89
Sovereign Special - 3.95 4.29 4.49
The Co-operative Bank - Owner Occ 5.75 4.10 4.35 4.49
The Co-operative Bank - Standard 5.75 4.60 4.85 4.99
TSB Bank 5.80 4.45 4.69 4.99
TSB Special - 3.95 4.19 4.49
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.95 4.69 4.79 5.19
Westpac - Offset 5.95 - - -
Westpac Special - 4.15 4.29 4.59
Median 5.89 4.50 4.69 4.79

Last updated: 2 December 2018 8:39pm

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