If by 'review' you mean more regulation, it's not the answer. Adding layers of clunk to the process only deters client engagement. Clients have zero interest in anything that's not about getting the job done. They don't care about what words you use to describe how we have their interests at heart, they expect it, they just want results and yesterday is good. There seems an industry has evolved around placing hurdles in the way of good business and like AML it only adds complexity while those it's intended to capture step around it, but I guess they can say "there I've made some rules now pay me" while everyone else suffers working through the layers of dross. Paperwork / regulation only adds cost, clients just want results and no amount of verbiage will improve pathways to that end. We're all about best practise, good client outcomes and getting the job done that's fit for purpose, it's why we exist, and we earn a commission for it and so we should and yes, good record keeping is important not just for future client engagement but also to protect ourselves ... got it! So if anyone from the industry is reading this, take note, after years of engagement with clients and advisers alike and conversations held across the board I can report no one is interested in more pointless regulation in fact if you could pare it back to a bare minimum would be great, the industry and clients will thank you for it.

keeping it straight & simple seems to be the hardest thing to do. making it complex & confusing looks like the trend.

Hi Paul As someone else has mentioned it’s been a lender requirement now for at least 25 years for a mortgage adviser to belong to an aggregator for us to be able to send the banks loan applications on behalf of our clients. I spoke with an auditor last year though and he made me aware that there are now individual advisers operating within the industry who have direct relationships with the banks bypassing the need for them be part of an aggregator. All the main banks announced prior to licencing’s introduction in early 2021 they would agree to deal with any adviser who obtained their own FAP licence directly from the FMA. The banks need to honour this earlier commitment made to the industry because the current Aggregator Monopoly has advisers with their own FAP licences being forced to belong to "Master FAPs" aka aggregators forcing advisers to pay steep membership fees and comply with duplicated regulatory layers which sees the adviser now being treated like an authorised body which they are not. Having a main bank now moving away from paying trail and short-changing some advisers in the process is the watershed moment for our industry. This bank is perfectly entitled to change the way it pays for business from advisers however it cannot renege on an earlier renumeration agreement signed which said for new loans settled BOTH an upfront and trail payment would be forthcoming. Any half decent lawyer could convince a judge that by law corporates must always honour written agreements which they sign, especially one which involves somebody's income for new business received. Part of the current problem for the mortgage adviser industry is that all deals done between banks and aggregators are done behind closed doors. We are expected to simply trust the aggregators that they have our backs but clearly, they didn’t when they first negotiated the earlier renumeration agreement with this lender. That the bank in question has now been allowed to get away with the above because aggregators (and industry bodies) have not challenged this decision legally illustrates once and for all that the third parties who are supposed to be our advocates only care about their own business models. Aggregators do not want to rock the boat with the banks because they all want to safeguard their current monopoly of controlling advisers’ access to the various lenders. I believe it’s only a matter of time now before the Commerce Commission and FMA forces the banks to break up the current Aggregator Monopoly with banks honouring what they all pledged to do originally i.e. have direct relationships with those mortgage advisers that have their own FAP licence now. This will replicate the adviser/provider model which already exists in the insurance industry. Monopolies when they are allowed to persist harm the consumer. There will likely always be an aggregator presence within the NZ mortgage industry however the moment advisers are experienced enough to work under their own FAP licence (why wouldn’t you want to) they will be able to avoid having to comply with duplicated regulatory layers and not having to pay an aggregator's membership fee to simply get their commission passed along to them from the banks once a week. P.S. industry bodies have been silent on the current Aggregator Monopoly. Why?

Financial literacy, access to lending and financial advice, the cost of insurance, and the cost of living are all strong headline themes. My observation is that the bird’s-eye view is often overlooked, and we do not acknowledge the role of government schemes and protections, including ACC, consumer rights laws, and other lending and conduct regulations. At the same time, the government continues to be comfortable allowing market leaders to set the tone, with examples extending to supermarkets and electricity providers. The real issue is not the quality or professionalism of advice. Rather it is the barrier that prevents lower-net-worth customers affording advice. and those costs are unregulated, causing the product providers to compete on the commission-based battle field, and in this arena, the cost of advice results in high cost of product. If we are honest, it takes a high income to live well in New Zealand, and the cost of service are always borne by the end customer. So who will be first to put this discussion on the table: is adviser commission really justifiable?

@valkyrie6 – thanks for confirming my understanding, which was that the “aggregator membership” requirement from banks significantly pre-dates FSLAA. I can appreciate the challenges presented by going from obligations pre-FSLAA to a double-whammy of FSLAA obligations. The grubby backhanders you describe in your final paragraph notwithstanding, I can see the attraction of the current arrangement from the banks’ perspectives. And I’m not entirely unsympathetic to the view that it provides enhanced consumer protection when compared with the more direct FAP-Financial Institution arrangements in other corners of the industry. FMA expectations about oversight of intermediaries are pretty tame in relation to what aggregators might require, at the granular level. In the recent case of Saanvi 2022 (t/a Saaga Mortgages), it was KAN that referred the matter to the FMA. I think that is noteworthy. Of the 99% of mortgage FAPs that are compliant with their own license requirements, how much of that compliance is due to improvements embedded by needing to comply with aggregator requirements? I’d wager it is greater than 0%. That leaves a barrier to advice problem: the consumer who goes directly to the bank, choosing ease of implementation over the value of independent advice from someone who is not part of a vertically-integrated organisation*. That’s where the likes of FANZ fits in the picture, I think, in a public-advocacy role (and not in the middle of commercial disputes). (*There’s a niggling worry that, at a certain level of abstraction, the financial services industry as a whole resembles a VIO.)