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BFCSA: ASIC's Friend of One believes Mortgage Brokers are 10 years behind him

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Mortgage brokers 10 years behind advisers, says exec

6 December, 2013  1 comments  Money Management

  Craig Meldrum is one person who thinks ASIC is doing a good job.  We had a funny feeling there may be one.  He is out there on his own its seems.

While the financial advice industry remains subject to much surveillance and scrutiny, the regulators are 10 years behind in bringing mortgage brokers to task, some claim.

n 2013 alone, the Australian Securities and Investments Commission (ASIC) has banned and convicted a number of mortgage brokers for misconduct, fraud, compliance issues and for providing misleading information, among other breaches.

Furthermore, the watchdog had cancelled or imposed conditions on credit licences of various mortgage broking houses for similar offences to those of troubled financial advice groups, such as compliance breaches, failure to train its staff and failure to properly assess loan applications.

The latest in a string of regulatory actions against mortgage broking firms was ASIC's imposing conditions on Award Mortgage Solutions' credit licence.

Award Mortgage Solutions did not properly assess and verify loan applications, which led to the potential for false documents being submitted to credit providers. Furthermore, the firm's mortgage brokers did not always provide proper disclosure to clients, nor did it properly appoint, supervise and train its staff and credit representatives.

However, while the financial advice sector had two major reviews in the last decade (Financial Services Reforms Act and the Future of Financial Advice package) and remains subject to continued surveillance — such as ASIC's recently announced review of risk advice — the mortgage broking industry has not had equal regulatory focus placed on the sector.

"There's no doubt that financial planners have been under the spotlight and had more regulatory reform than any sector," said Financial Planning Association chief executive officer, Mark Rantall.

"We would support a level playing field for all and we are particularly concerned about people representing themselves as financial planners when they're not licensed to do so."

The financial planning sector, according to the head of financial advice at Australian Unity, Craig Meldrum, has been regulated a lot longer and the mortgage broking industry is coming up to where financial planning already is.

"They are probably 10 years behind where financial planning is, but they are on that path," Meldrum said.

"Should accountants and financial planners be on an even regulatory playing field? Because financial planners are coming up to where accountants have already been for years — we are talking about different professions."

However, Meldrum said ASIC is one of the more proactive regulators in the industry.

"ASIC is probably doing a much better and has a more productive role than some of the other regulators," he said.

"The Tax Practitioners Board and what it does for accountants, it is not as proactive as ASIC. ASIC has been taking action with respect to self-managed super funds, property spruikers, limited recourse borrowing arrangements, as well as looking after what the financial planners are doing."


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  • doyla66
    doyla66 Friday, 06 December 2013

    ASIC is only applying token penalties

    Hi Denise remember our old mate Matthew George of Money Choice fame. He was the salt of the earth if you think back, butter would not melt in his mouth and as far as doing anything at all wrong by his clientele well that was just unthinkable. After many requests to ASIC regarding some of his very suspect practices and unethical conduct they finally did act, nearly TWELVE MONTHS later. He was found guilty of two issues of noncompliance and banned in two areas of his business (which can be viewed on ASIC's website). The problem being of course is that yes they (ASIC) did finally act but over the period they were not putting him on notice or making it know to Matt George he was under investigation which allowed him to be still at it business as usual as far as he was concerned. While ASIC sat and waited the victims continued to pile up, then as victims we had salt rubbed into the wounds by Matthew George being found guilty by ASIC but the victims are not catered for in any way. My real gripe with the entire system is, what is the point of a regulator or having regulations in any industry if it does not benefit the affected parties if the perpetrator is found to be guilty of the suggested noncompliance. If ASIC register and regulate the industry then when a breach of compliance is undertaken by their registered member it should not be about a fine being paid to ASIC or limp wristed bans being put in place, it
    should first and foremost be about restitution and aiding the victims first then apply penalties.
    The entire structure of these departments ASIC and its offshoots FOS and COSL is all wrong and flawed in its means of investigation. For many years ASIC have been stating no systemic issues here, they know that to be a convenient lie but if they were to be above board and admit the problem does exist the process would be sped up ten fold as they would be investigating the entire industry and constantly checking compliance instead of persuing these cases on at a time.
    Of course at the top end of town with our Banks (don't get me started with these crooks) there is never complete investigation they are a law unto themselves allowed to rape and pillage without recourse. But that's another story for another day.

  • doyla66
    doyla66 Saturday, 07 December 2013

    ‘Goldman Sachs with guns’

    Max Keiser discusses the need for powers to stop the aggressive banker "begocrats" constantly shaking down those passing the City. They look at ‘Goldman Sachs with guns’ in Japan and the shakedown unit at RBS and their threatening ways.. December 05, 2013 08:30 10

  • doyla66
    doyla66 Saturday, 07 December 2013

    Hi Stan, I am with you, ASIC, FOS,COSL,The Big 4 lenders the smaller lenders are all crooks. Nab have put us through Hell and the deceptive and criminal fraud, false misrepresentation continues some 6 months after Nab took possession of our home of 42 years, to the point I have had to put a Personal and Safety Intervention order in to protect us and our property. Cannot explain further for fear of repercussions. Sick isn't it that Nab's fraud has eventuated in this sort of fear. My husband and I are now spring chickens and have never had an issue with the law until now. This could have been avoided had Nab fessed up and left us alone.

  • doyla66
    doyla66 Saturday, 07 December 2013

    Hi Stan, I agree: full or partial restitution first, to aid the victims of these leeches, and then complete whatever regulatory issues and fines that apply under ASIC. They've got it all upside down: we need human aid and financial support before ASIC wend their weary and disinterested way to some form of "justice", to benefit ASICs bottom line, without consideration of our needs. Furthermore their lame penalties against these perpetrators of crime and misconduct are clearly inadequate as white collar crime proliferated over the 14 years of ASICs rule. We saw it with the Storm cases: ASIC has to be dragged kicking and screaming into some form of compensation arrangement and even then they plea bargain to save the CBA and others embarrassment. Pathetic. Don't get me started on the glaring inadequacies of FOS/COSL: up against a Big 4 Bank it's like David and Goliath on the slippery slopes of Everest! Level playing field? Fairness and justice? Not in this country, unless you carry a big stick to knock the FSPs into line. Rule of Law has been surpassed by Law of the Jungle and Australian humans have no intrinsic rights and have to fight every inch of the way for authentic fairness. I see no signs that this degenerative system will ever change under any existing government process, to date - the further I get into this system the clearer it gets. In the final analysis there will be only one way that the depth of change required to set this country on a path to sustainable success will occur: Iceland was right.

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