A leading Queensland Property Analyst and Developer has slammed the Federal Governments move to merge finance and banking complaints into a mega Agency as nothing more than a cop out.
Chris Anderson from AFT Projects laughs at Federal Budget changes which will see the merging of the three now separate complaints pathways for dud finance operators – The Financial Ombudsman Service; The Superannuation Complaints Tribunal and the Credit and Investment Ombudsman; into one new super Agency
“It’s like putting new tyres on a car with faulty brakes. A change to complaints resolution won’t stop the complaints.”
“It’s the entire finance and banking system that’s failing, not the complaints mechanisms.”
“When you have a sector that receives more than 80 complaints a day under self-regulation, surely it become clear that the sector itself is the issue.”
The final report of the Retail Banking Remuneration Review conducted by Stephen Sedgwick AO, released last month was scathing of the sector and recommended massive changes to mortgage broker remuneration after months of investigation.
Mr Anderson says the finance and mortgage and banking sector has become over-bloated with Financial Planners and Mortgage Brokers, few of whom can live up to the marketing hype their franchise HQ’s or head offices claim.
‘Many of these guys were simple salespeople yesterday who today, with new shoes on, step out and claim to be qualified to give life changing financial advice. Give me a break.”
“The closest thing to financial experience that many of these brokers have is not overpaying for a bad banana at a supermarket check-out.”
Mr Anderson says the behavior of some in the Mortgage Broker quagmire has seen the home and property lending sector fly frantically out of control.
“One only has to look at the game played by many unscrupulous operators in recent years where they’d push clients to ‘lock in’ to low mortgage rates, making themselves thousands on commissions but in fact costing the borrowers more.”
Mr Anderson says the old “Lock in Low” had become a favorite fast buck earner for many brokers.
“They have, in the past, received their commissions on these new loans up front. Given that the average borrower holds that property for around five to seven years, the additional costs faced by the borrower to make the change are never recovered by that property or home and the only one that wins overall is the broker who walks away with the commission and the on-going trail and Grandfather payments they receive for the life of the loan.”
Mr Anderson says it is now up to Treasury and regulators, ASIC and the ACCC, to make sure we finally see an industry that is transparent.
“Time for an overhaul. We now need to see a Katter Style Royal Commission that focusses heavily on the mortgage broker and financial planner sector to make sure we bring some level of stability and management back to the property sector.”