Mortgage Choice planners not impacted by grandfathering changes
Publicly-listed mortgage broking and financial advice business, Mortgage Choice, believes its planners will emerge substantially unscathed from the removal of grandfathered commissions from 1 January, 2021, but has acknowledged key impacts on its mortgage business.
In a release to the Australian Securities Exchange (ASX), Mortgage Choice chief executive, Susan Mitchell said the Royal Commission’s recommendations regarding broker remuneration needed to be thought through carefully.
“The proposed changes could have a large impact on the mortgage broking industry and therefore competition within the home lending sector,” she said. “Ultimately they could give more pricing power to the major banks which would lead to less choice, less access to credit and higher interest rates for consumers.”
Mitchell noted that the Government had proposed a ban on trailing commissions on new loans from 1 July, 2020 while trails on existing loans would remain unaffected. However, she also noted that the Government proposed a further review of broker remuneration in three years’ time.
“These are potentially significant changes which require careful consideration to ensure they do not have counter-productive consequences for the home loan market,” she said.
Mitchell said that where grandfathered commissions and financial advice were concerned, the impacts would be minimal for the Mortgage Choice Financial Planning business as the model had no reliance on grandfathered commissions.
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.
