FPA welcomes Choice shadow shopper findings on reverse mortgages
Jo-Anne Bloch
The results of a shadow shopping survey of reverse mortgages by consumer protection body Choice this week “reinforces the need for good financial advice”, according to Financial Planning Association (FPA) chief executive Jo-Anne Bloch.
“Reverse mortgages can be a useful part of a financial strategy, but they are a complex product and should only be used on the advice of a licensed financial planner,” she said.
The Choice shadow shopping survey of 10 mortgage brokers and five companies offering reverse mortgage products found consumers often did not receive enough information to make a truly informed decision about the product.
It prompted Choice to call for an improvement in the standards exhibited by mortgage brokers in regard to the information and advice they are issuing to the public about reverse mortgage products.
Providing appropriate advice for a client is a “clear obligation” for FPA members under the association’s Rules of Professional Conduct, according to Bloch, regardless that reverse mortgages do not “fall neatly” under the Corporations Act.
“A decision to use a reverse mortgage should take account of a client’s individual circumstances,” she emphasised.
Meanwhile, the FPA has welcomed the Simplified Superannuation reforms, which passed through the Federal Senate into law earlier this week.
Bloch said the FPA was “pleased with the Government’s open and consultative approach to the reforms and appreciated the Labor Party giving the legislation bipartisan support”.
“We are particularly happy that the Government’s decision to scrap reasonable benefit limits (RBLs) reflected the recommendations of a number of FPA submissions.”
Recommended for you
Money Management examines the share price of financial advice licensees over one year to 31 March, with M&A actions in the final quarter having a positive effect for two licensees.
A $3.5 million settlement for victims of Melissa Caddick has been approved by the Federal Court following an initial agreement last December.
The Reserve Bank of Australia has delivered its first rate decision since the introduction of a new board structure last month.
Digital advice provider Otivo has launched an interactive tool, powered by artificial intelligence and Otivo’s own advice engine, to help answer client questions.
