Aussie advisers fight back against reform

David Bailey

So far in the ongoing Royal Commission into financial services, advisers have faced scrutiny over their pay and their relationships with the big banks. The Commission's interim Haynes report said value and volume-based commission "has been an important contributor" to financial services misconduct.

Influential figures including CBA CEO Matt Comyn have criticised remuneration models. Comyn suggested a fee-for-service model to the anger of Australian advisers. Comyn's words raised concerns in New Zealand, with all of the major NZ banks Australian-owned.

In response to criticism, mortgage advisers, led by major group Australian Finance Group, have begun a multi-platform media campaign to outline the benefits of the adviser model. The group argues advisers create more competition among lenders, and lead to a wider number of lenders operating in the market. 

Australian Finance Group CEO David Bailey (pictured), took aim at the banks, which have been sharply criticised for their own practices during the Commission: “We believe that the erosion of public confidence in the major banks and their failure to meet community expectations is inextricably linked to the immense market power that they wield. In our evidence to the Royal Commission, we made it clear that the competitive tension delivered by a viable mortgage broking channel is vital to help limit oligopoly behaviour in an industry that is dominated by the four major banks.

"Our campaign highlights the potential threat posed by the introduction of any new regulations that result in an uneven playing field being further skewed towards the major banks and away from efficiency and competition. It’s not in anyone’s interest but the big banks to allow consolidation around their business models."

An excerpt from the Australian campaign can be found here