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Australian Royal Commission will impact NZ

Dr Deen Sanders, the ex-CEO of Australia's Financial Adviser Standards and Ethics Authority, predicts pressure on Australian mortgage adviser fees will have a "flow-on" effect to New Zealand. 

Monday, January 7th 2019, 8:04AM

Sanders, now a Sydney-based Partner covering Governance, Regulation and Conduct at Deloitte, says pressure on trail commission and remuneration from lenders will end up having a knock-on effect in New Zealand, due to the close regulatory relationship between the two countries.

The Royal Commission into financial services has placed the spotlight on the big lenders and highlighted endemic misconduct at the big banking groups. The Commission has also placed scrutiny on the relationship between mortgage advisers and the banks, and whether commission is fair on customers. 

The Commission is expected to recommend a ban on trail commission, but that would not become law unless the Government pushed for additional legislation. The Reserve Bank of New Zealand are conducting their own review of New Zealand's banks, but there are currently no signs of a radical move to ban or change fees and commission for advisers.

Yet Dr Sanders believes New Zealand advisers should watch developments closely: "I expect Hayne to recommend banning commission of any form for financial products. We just don't know yet whether the government will follow such an approach or recognise that there could be a consumer access consequence and potentially constrain or control, rather than ban."

"The banks are not yet committing to a wholesale ban on mortgage broker commission, and are not likely to move because of first mover disadvantage risks. But if the Australian government bans them, it is only a matter of time before there is an effect in New Zealand," Sanders added.

Sanders said New Zealand has historically moved "in the same direction" as New Zealand: "We saw that with the financial advisers regime, with the introduction of education requirements that then flowed through to New Zealand, and professional standards ideas that flowed back in a different way to Australia. Anything that happens here [in Australia] in the banking sector should be scrutinised very carefully by the banking, financial advice and mortgage adviser sector in New Zealand."

Sanders added: ""Things like banning or constraint on commissions, including for the Australian broking community, which seems likely to be a recommendation from the Royal Commission, may well have a precedent effect for New Zealand. Maybe not with the same immediacy, but it is definitely something to watch because there will be a flow-on effect. The detail of what and when will likely be hammered out as a legislative debate in 2019."

 

Tags: financial advisers regulation Royal Commission

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.24 6.79 6.65
ANZ 8.64 7.84 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.24 6.79 6.65
ASB Bank 8.64 7.24 6.79 6.65
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.24 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.84 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 7.04 - -
Co-operative Bank - Owner Occ 8.40 7.24 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.74 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.69 6.45 6.19
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.75 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.25 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.25 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 ▼8.09 ▼7.59 ▼7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 ▼9.09 ▼8.59 ▼8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.84 7.45 7.25
SBS Bank Special - 7.24 6.85 6.65
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.74 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.04 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.24 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.89 7.49 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.89 6.65
Median 8.64 7.29 7.32 6.65

Last updated: 28 March 2024 9:42am

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