NCCP blocks broker 'independence' claims
By
Adam Smith
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26/09/2011 7:30:00 AM
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3
comments
An NCCP amendment has dictated that brokers can no longer describe themselves as 'independent' in advertising their services to clients.
The amendment restricts the use of the terms 'independent', 'impartial', 'unbiased' or any other words with similar connotations. The amendment dictates that licensees cannot use the words unless they do not receive any commissions not rebated in full to the borrower, do not receive any other gifts or benefits from lenders, are not subject to any restraint in product offerings and are not subject to any conflicts of interest.
Gadens Lawyers senior partner Jon Denovan told Australian BrokerNews the restrictions see the mortgage broking industry become subject to the same rules governing the financial planning industry.
"The same restriction is there for financial planners. They can't call themselves independent," Denovan commented.
Denovan confirmed that brokers will not be able to use the terms in their marketing, or advertise their services as "independent".
"To be independent you would have to have no upfront and no trail from the lender," he stated.
However, Denovan predicted the industry will find a way to adapt.
"I think the industry will find a way around it somehow. We'll find another word, like 'we're on your side' or, as Aussie said, 'we'll save you'. It kind of says the same thing as 'independent'," he said.
Denovan indicated brokers who use any of the terms will have to rethink their marketing strategy.
"They probably should never have used those terms as they are very high standards to live up to, and very hard to prove in a court if you receive different commissions from different lenders," Denovan said.
Latest Comments
Total:
3
comment(s)
Ian Jervis on
26 Sep 2011 10:26 AM
Does this mean that Politicians who call themselves Independent but side with a major party will also have to find a new title?
gmashe on
26 Sep 2011 10:47 AM
Talk about storm in a teacup. The CCA/TPA has effectively meant the ban of these words for many years. Brokers using these words have been subject to ACCC enforcement action in the past. Broker beware - if you're going to advertise, seek the assistance of a compliance or legal professional.
James Tsolakis on
26 Sep 2011 11:01 AM
The industry is now wide open to the political correctness, and ineptness of ASIC .. where are the associations on this?