Mortgage brokers warm to joint APB

The New Zealand Mortgage Brokers Association (NZMBA) has not ruled out co-operating with a pan-industry approved professional body (APB), according to the organisation's head, Megan Salt.

Monday, March 17th 2008, 5:18AM

by David Chaplin

Salt said the NZMBA, which had earlier indicated it would create its own APB, remained open to the prospect of joining with the so-called G4 group of other financial advisory bodies investigating a cross-industry approach to coming regulation.

"We have said the NZMBA was well-placed to be an APB," she said. "But the reality is this is a changing market and we need to adapt. It is sensible to talk co-operatively.

"We could join a pan-APB - it depends on how these early stages of talks [with the Institute of Financial Advisers (IFA)] goes."

Last week the NZMBA forged an agreement with the IFA to "work strategically" on a number of issues.

In a joint statement the two groups said: "Each organisation acknowledges the other as the leader in their respective fields, NZMBA in mortgage broking and IFA in risk insurance, savings and investment."

Salt said the talks were not a precursor to a merger but were intended to explore "synergies" such as cross-accreditation of members.

She said mortgage brokers are rapidly diversifying into insurance advice and many IFA members also sell mortgages. "We're happy to build trust with the IFA and develop 'win-win' situations," Salt said.

Dave McMillan, head of the Professional Advisers Association (PAA), hailed the agreement as a step towards a more inclusive pan-industry APB.

"While the announcement is not entirely clear about whether the NZMBA would like to join the pan industry APB discussions, the PAA would certainly welcome such a development," McMillan said in a statement.

"The time for single sector financial sector professional associations has passed. Contemporary organisations are now ensuring their members can receive professional development for a range of product sectors within a single professional organisation."

The PAA has been targeting mortgage brokers in a membership drive with over 230 due to attend a series of roadshows the adviser body has planned over the coming weeks.

Salt said the PAA's "aggressive marketing strategy" was not a threat to the NZMBA's member base.

"The PAA is a much smaller organisation," she said. "With the IFA we would represent about 2,500 members across the whole spectrum of financial advice."

McMillan said the alliance of the NZMBA and IFA made sense given their "similar philosophies".

"They're both highly prescriptive organisations, whereas we're more principles-based," he said.

The NZMBA claims about 1,000 members while the IFA has reported a membership base of 1,400. The PAA has about 700 members.

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