Group FAPs could limit choice of suppliers: Newpark

Newpark Home Loans general manager Andrew Scott believes group FAPs, with responsibility for diligence on lenders, are likely to have an “approved product list” for their advisers, controlling who they can place business with.

“Advisers may join a group thinking they have open access to every lender, but they might be in for a shock, and there could be restrictions on what they can and cannot do,” Scott says.

Scott believes group FAPs will be cautious about which lenders and insurers they deal with, and will “determine criteria for which products make it onto approved supplier lists”.

He adds group FAPs may not be able to approve smaller second tier lenders due to a lack of publicly-disclosed information, and are likely to stick with retail banks and large second tier lenders.