Mortgage brokers avoid regulation
Parliament's Commerce Committee has recommended excluding advice "in respect of an estate or interest in land" in its report on the Financial Service Providers (Pre-Implementation Adjustments) Bill, which amends part of the legislation covering the regulation of financial advice, to avoid "capturing the wide range of people involved in giving advice on land" for purposes other than investment.
The report singles out mortgage brokers in respect to advising on mortgages, which is says "should be treated as advice on credit rather than investment."
That means it will be classified as a category two product, allowing mortgage brokers to avoid the burden of retaining to meet minimum standards to be an Authorised Financial Adviser, though they will still have to register with the Companies Office.
Still, mortgage brokers who have been extending their services into other activities, such as selling KiwiSaver or providing wider financial advice will be caught by the new regime, though the carving out of insurance advisers also means that it is safe for brokers to diversify in that area if they want to skip around becoming an authorised adviser.
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