Ryan Smuts: What to expect when you use a mortgage broker?

How do you know a broker is going to give you the best advice, and why is it worthwhile going down this path as opposed to going to your own bank?

Well, this is a timely topic and definitely is a valid question. Typically the barriers to entry in our market are relatively low, and in terms of
qualifications, not too much has to be done to be giving advice in the mortgage industry. That being said, there are definitely a lot of changes
happening within our industry being driven by the FMA and MBIE – more specifically the Financial Advice Code Working Group.

The new financial advice regime is aimed at making quality financial advice more accessible to New Zealanders. The Amendment Bill (to the Financial
Advisers Act 2008) is aimed at ensuring a duty of care is met when providing financial services, and ensuring that the client’s interests are always
put first. The Code of Conduct ensures that ignorance (lack of competence) doesn’t get in the way of the client’s needs being prioritized by the
financial adviser, and it does this by ensuring that all financial advisers meet a minimum level of competence and skill. It is expected that by
mid-2019 the Code of Conduct and regulations are to be finalised. Once this is all passed/approved it is likely that this regime will come into
force by Q2 2020, at which point there is a 2-year transitional period where minimum standards must be met,
and finally, by mid-2022 all financial advisers must be fully licensed.

So what does this mean for you as a potential client? Well, really in short it means that there are more regulations being put in place ensuring that
those who present themselves as financial advisers are in fact adequately qualified to be providing advice to you and are always putting your interests
first. This protects you because the level of advice as a whole should lift, along with the understanding of products in the marketplace across
several brokers. Independent advice is also beneficial because when approaching a bank directly not only do all bankers not need to meet these
requirements but also note that the banker only has their products to offer – whereas a broker would have access to the whole market.