Speaking to Mortgage Business, Waterfall Way Associates director Dacian Moses said the parallels between financial product advice and credit advice are too obvious to ignore.
“Starting with the fact that it’s the same piece of legislation but different, carved out of Financial Services Reform and then stuck back on the side in some sort of parallel regime that anyone with a sense of irony finds embarrassing,” Mr Moses said. “There are massive parallels.”
Industry figures have signalled the potential for broker commissions to face extinction over time, driven by FOFA and a renewed focus on conflicted remuneration of financial services.
Such comments led MFAA chief executive Phil Naylor to make a clear distinction between financial planning and mortgage broking.
“In essence, there is a fundamental difference and risk between the two professions – the ‘money flow’ is in opposite directions,” Mr Naylor told Mortgage Business.
But according to Mr Moses, the commission payments don’t go in different directions.
“So I do think there are issues with aggregators getting married to product developers in the same way that occurs with financial product advice,” he said.
“There is an enormous amount of change that will have to happen in the broking industry. I’m not sure what will trigger it.”
Mr Moses’ comments come after NAB head of retail banking Gavin Slater flagged conflicted remuneration as an issue in mortgage broking.
Speaking at the UBS Australian Financial Services Conference in Sydney this week, Mr Slater criticised other lenders of paying bonuses to mortgage aggregators who write more business.
‘‘At the end of the day brokers are there to be independent and to give their customers the best advice,” Mr Slater said.
“And when you’re paying volume based bonuses to aggregators, I have a question around that,” he said.