All Topics / Heads Up! / FSR style licensing regime for mortgage brokers

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    @noddies
    Join Date: 2003
    Post Count: 151
    October 24, 2006 - 12:14 am

    hi all[biggrin]

    From the Financial Standard

    Monday, 23 Oct 2006 11:39AM

    Mortgage brokers can expect to face a new licensing regime as early as next year that will align regulation of the mortgage broking industry with rules that prevail in the financial planning industry.

    Ian Clyde, chair of the Uniform Consumer Credit Code Management Committee at Consumer Affairs Victoria, said on Friday that his office completed a review of the regulation of mortgage brokers and provided its recommendations to a ministerial council.

    The recommendations include licensing of mortgage brokers dependent on achievement of minimum competency and integrity standards, accreditation and membership of a dispute resolution service.

    “There will be an onus on the broker to sell a product that is appropriate to the borrower’s needs,” said Clyde. “It will look a little like FSR. We have been looking at that type of system.” The Financial Services Reform Act (FSR)is the primary regulatory regime covering financial planners.

    Clyde, who was speaking in Sydney at a conference organised by SEQUAL (Senior Australian Equity Release Association of Lenders), said legislation could be ready next year.

    “The Consumer Credit Code is based on the idea of truth in lending,” he said. “That does not take us very far with reverse mortgages. It is a more complex product and needs advice.

    “We are not happy with the current level of consumer protection. Anyone in government would tell you that. We know that levels of financial literacy are low.”

    The $1 billon reverse mortgage market has attracted plenty of attention from regulators in the past couple of years because of its high growth rate. Trowbridge Deloitte estimates that more than 20,000 Australians have taken out a reverse mortgage and the number using the products is growing at more than 50 per cent a year.

    Regards
    Bryce Inglis
    AR282821

    Investment & Implimentation manager

    [email protected]

    Replies on this site are intended as general information only, as any specific investment solutions/advice must only be given in accordance with the requirements set out in the Financial Services Reform Act 2001 and the ASIC guidelines as set out in PS146.An appropriate professional should be consulted for specific advice

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