ANZ reveals stance on FAPs
ANZ has laid out its position on the new regulatory regime, stating it will work with adviser businesses and groups that hold a financial advice provider licence.
Monday, October 21st 2019, 7:47AM 8 Comments
The country's biggest lender wrote to advisers on October 17 to state it would "only deal with intermediaries who are lawfully able to provide regulated financial advice to retail clients either under their own FAP licence, or under another entity’s FAP licence".
The bank's position will come as a boost to adviser businesses keen on holding their own FAP licence, rather than working underneath an aggregator group's.
It is understood the lender is happy for dealer groups to have no legal or civil liability for member businesses that hold their own FAP licence.
The system will allow adviser FAPs to operate underneath a group FAP, with the group holding an agreement with the lender.
In the letter to advisers, ANZ said it expected FAP licence holders to "meet industry standards" and show "robust advice and governance processes". The lender wants "appropriate digital security measures and quality assurance controls" to ensure the needs of its customers will be met.
As ANZ prepares for the new regime, it will also review its current Mortgage Adviser Agreement, to ensure it is "fit for FSLAA's purposes", the letter said.
An ANZ spokesman confirmed the details of the letter to TMM Online.
« Mortgage Lab and Kepa plan for new regime | SBS targets big banks with new 2 year rate » |
Special Offers
Comments from our readers
Isn't this a straight out breach of privacy ?
@Amused also makes a very valid observation that the spotlight will now go on dealer groups that charge a business multiple fees for what is really just mortgage commission administration.
Value is always subjective and unsurprisingly in the eye of the beholder. Newpark has long understood this and will continue to advocate long into the future on behalf of all Advisers.
In exchange for the one fee that we do charge a business, Advisers get assistance with the licensing process, an arms-length supplied compliant CRM, a diverse range of lenders & ancillary suppliers, and a formal practicing certificate program.
Value is only quantified when a dealer group makes business as usual 'easy' for the Adviser and we're very happy that this will continue to be our core focus.
As you and Mr Scott have pointed out, value from dealer groups is going to be a bit of a spotlight.
It always has been at some level, with many advisers focused on the $ returned to them.
Dealer groups that remain focused on the $ returned to the adviser are going to find things a little conflicting, and the new regime is challenging both their value and their relevancy.
Frankly ANZ has had the advantage of a long sustained beat up from the FMA, so their decision is not really a surprise, with the FMA likely strongly suggesting some guidance around their approach and engagement with the market.
Either way a great result for the advice industry and one many of us have been vocal about ensuring we see the changes desired and the compliance with the law.
My sources have more recently suggested that BNZ is reconsidering its position to follow in ANZ’s footsteps. I look forward to seeing this in due course too.
If that data is being mined for other purposes, then yes, there is an issue. Though probably a stretch in the scheme of things as the NZ and Aussie businesses with the one you're suggesting have a common link.
The more important piece on privacy is the adviser conduct. How many advisers have privacy sign off on release of information for their businesses?
This is required to submit an application to a provider. It may be implied by completing an application form, most give authority for the advice business to release information to the provider, but they don't have the authority to release the application form to the provider so they have the authority to ask for information.
This may sound like semantics, but the sending of the application form without authority to do so is a client privacy breach. Implied or otherwise.
Yes, I know it sounds crazy, but it is the law on this.
The only consistent is every time something changes the fees go up or new fees come in.
There is also the question about proof that the mining and breach of privacy is happening. The above needs tidying up first, the reality is this is somewhat part of the darkweb as those doing things in the background won't be forthcoming about data mining things.
And there is the aspect of trust too, if we don't trust anyone we struggle to have any industry co-ordination.
There's the argument about inhouse systems and access controls, except that even these approaches today have exposure issue most are not aware of.
It's not going to be an easy one to deliver on as you have suggested, while at the same time, that's probably exactly what should be happening.
Sign In to add your comment
Printable version | Email to a friend |
ANZ been the largest lender in the country has just signalled to the industry that Mortgage advisers who are deemed fit by the FMA to hold their own licence and become a FAP will be able to have direct lending agreements with them. ANZ confirmed this to me yesterday. This is a logical & well thought out decision made by ANZ. ANZ understands that the adviser is the one giving the advice to the customer, NOT the dealer group the adviser belongs to.
Dealer groups going forward are clearly going to have to demonstrate value to their members beyond traditionally just enabling them to hold relationships with the various banks & insurers. The insurers have already signalled that they will continue to allow direct agreements with insurance advisers as long as they have their own FAP. This is yet another example of the increasing obsolescence of dealer groups when advisers are able to hold direct relationships with providers.
Of course many advisers have now tied themselves to their group by them been completely dependent on their cloud based CRMs to operate their businesses. Reading ANZ’s comments about them wanting FAPs to have “appropriate digital security measures” going forward I can’t help but think that the banks are now finally waking up to the privacy implications of mortgage advisers using group owned cloud based CRMs especially those groups with overseas owners. Are all mortgage advisers who are currently using a group owned CRM telling their clients about the third parties overseas who are in receipt of their personal and financial information?
I said banks earlier because with ANZ been the largest lender in the country and thus having the biggest market share of business from mortgage advisers the likes of ASB and Westpac will now inevitably follow ANZ’s lead. The smaller lenders will join the herd also. This just leaves BNZ then who now have to decide whether they want to alienate themselves with mortgage advisers and insist that we all have to operate under a dealer group’s FAP just to be able to send them business.
Well done ANZ!