Banking study submissions highlight adviser issues

This has been highlighted in a submission to the Commerce Commission’s market study into banking competitiveness by financial technology platform AERA, the bank alternative for first home buyers.

AERA says simply the tool is a bank’s measure of how many applications are settled versus the number of applications received.

“We are concerned this particular measure encourages mortgage advisors to only apply for a mortgage at one (or maybe two) banks which may be to the detriment of the customer. Anecdotally, mortgage advisers are actively encouraged to maintain a certain closure rate with a lender, and non-performance of this metric could place their lender facility at risk.”

AERA says it feels this is contrary to the customers’ view of a mortgage adviser’s ability to “shop around for the best deal” amongst all of the lenders in market. “It is also a metric that may result in multiple poor customer outcomes where Mortgage Advisors are actively discouraged from requesting competitive tenders for their customers,” the submission says.