Consumers fear brokers 'have their own interests at heart': ASIC

by Mackenzie McCarty12 Sep 2013

ASIC has just released its 2013 Stakeholder Survey report and,overall, it appears that stakeholders, including brokers and aggregators, hold a generally positive view of the regulator - but that warmth doesn't necessarily transfer from consumers to brokers themselves.

One area where consumers and regulated stakeholders showed a particularly marked difference was when it came to the following questions: “Do investors and consumers have access to the advice and information they need?”

Half (50%) of the regulated population agreed that consumers have access to advice that meets their needs, while only 40% of consumers agreed.

ASIC believes concerns about the reliability of advice and information from industry gatekeepers, including mortgage brokers, is a key factor behind the latter figures.

“Some investors and consumers were concerned that the various gatekeepers in the system who should be able to help them with advice and information only ‘have their own interests at heart’, rather than those of the consumer,” reads the report.

“For example, one consumer was offered three options for a mortgage by a mortgage broker and felt that vested interests influenced the information she was given.”

It was through the broker but they are tied in and give me three options and keep pushing [brand] is good.” (Investor/consumer)

Furthermore, industry associations felt that when it becomes ‘excessive’, disclosure becomes ineffective for consumers and inefficient for industry.

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  • by mac 12/09/2013 10:22:53 AM

    We / ASIC have to decide if we are advisers or brokers. Me personally I think we do both but I really don't want to be burdened with the official title of "adviser" as that implies we have to act in the clients best interest at all times which is not possible with the way we get paid and the way some lenders are not available to deal with brokers. THIS IS NOTHING TO BE ASHAMED OF. At the end of the day the consumer / investor needs a product and we offer a selection. We may also give advice on credit structures etc but which can be many times more valuable than a few basis points but that is not product / lender specific.

  • by Keith of the West 12/09/2013 10:36:42 AM

    Typical government bureaucratic philosophy and tax payer funded thinking!.

    I cannot see one of then joining our industry and being tied to commission based income against the security the have every fortnight that their pay cheque is deposited to thier account

  • by hmmm 12/09/2013 11:06:13 AM

    That's weird......none of my clients were asked for their opinion....go figure..
    One curious point. If they thought that, why were they using a Broker?
    These are the types of surveys you do when you want to change something, and need a justification. Governments do it all the time; you say you've done a survey, and conveniently always get the result you want, so you can implement the decisions you were going to do anyways. And the best part is no one ever gets to see the results of the survey to legitimize the data.