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The Customer Owned Banking Association said yesterday that the transparency of a financial adviser register should be extended to retail banking and mortgage broking.
“The new financial adviser register will boost transparency and help consumers distinguish genuinely independent advisers from major bank shopfronts,” COBA said.
Commencing at the end of next month, the register will disclose the firm that controls the licensee who authorises the adviser.
COBA CEO Mark Degotardi said the same principles of transparency and consumer empowerment should apply to sub-brands in retail banking and mortgage broking.
“Major banks use sub-brands to lure consumers who don’t want to bank with a major bank,” Mr Degotardi said.
“Major banks own, totally or substantially, broking groups comprising an estimated 40 per cent of mortgage brokers,” he said. “Consumers deserve effective disclosure about who they’re really dealing with.”
Mr Degotardi said ASIC has warned about significant and continuing consolidation in the funds management industry and the challenges of vertical integration in banking and along the product distribution chain.
Similar observations were made in the final report of the Financial System Inquiry.
“Transparency about ownership will help empower consumers to avoid dealing with entities that have a record of acting against the interests of consumers,” he said.
“The most effective way to deter such conduct is to ensure that the entity can’t hide behind subsidiaries and sub-brands.”