INDEPENDENT NEWS

Hayne report should add to wave of reforms for consumers

Published: Tue 5 Feb 2019 10:28 AM
The Commission for Financial Capability believes the ripple effects of the Australian banking inquiry report will help put Kiwi consumers back at the centre of the financial services industry.
Tom Hartmann, Managing Editor of CFFC’s Sorted website, says recommendations by Commissioner Kenneth Hayne QC for mortgage brokers to be paid by customers rather than banks would turn the mortgage broking business model on its head, and that could be a good thing for consumers.
“Currently, if you’re working with a mortgage broker you have to ask ‘Who are they getting paid by? Whose interests do they serve?’ Banks can look at mortgage brokers as their customers, instead of the borrowers, who can get lost in the mix,” says Hartmann.
“New Zealanders can’t grow their futures if they get advice that is conflicted, products that are not designed for their benefit, and results that are weighed down by exaggerated fees. To thrive, we need a financial services industry that supports and empowers consumers to reach their best possible position."
He acknowledges that there are some “heroic” mortgage and insurance brokers who work in their customers’ best interests, but they are operating within a system that does not always have consumers at heart.
“There would be some pain as a new business model is developed that is more customer-centric, but it’s a change that has to happen.”
Hartmann noted the Hayne inquiry followed the New Zealand inquiry of the insurance industry, led by the Reserve Bank and the Financial Markets Authority, which made similar findings regarding insurance brokers’ conflict of interest.
“There’s a movement going on to remodel the financial advice regime – changes are on the way and the industry needs to get on the front foot and make a new system work in a way that’s sustainable for the industry while prioritising customers’ needs. If they don’t, regulators will step in to defend everyday borrowers, savers and investors.”
ends

Next in Business, Science, and Tech

Biosecurity New Zealand – Situation Update 2
By: Biosecurity NZ
Making sure multinationals pay their fair share
By: New Zealand Government
NZ dollar jumps a cent as Reserve Bank wrong-foots traders
By: BusinessDesk
Four endangered sea lions dead in nets in one week
By: Forest And Bird
Minister to visit fruit fly operation
By: New Zealand Government
New species of fruit fly found in Auckland
By: Ministry For Primary Industries
Biosecurity New Zealand – Situation Update 3
By: Biosecurity NZ
Devonport Queensland Fruit Fly Situation Update 1
By: Biosecurity NZ
Auckland – controls on produce movement in place
By: Ministry of Primary Industries
PM's Post-Cab Conference 18/2/19: China Relations, DigiTax
By: The Scoop Team
It’s time for Google and Facebook to pitch in like the rest
By: Green Party
Tax on internet giants must be revenue neutral
By: New Zealand Taxpayers' Union
Tax Working Group's capital gains proposal keenly awaited
By: BusinessDesk
Official Cash Rate unchanged at 1.75 percent
By: Reserve Bank
View as: DESKTOP | MOBILEWe're in BETA! Send Feedback © Scoop Media