Many brokers are considering expanding their activities beyond home loans as they seek ways to widen their sources of income.
Those who want to sell KiwiSaver retirement plans will be subject to the stricter of two regulatory regimes envisaged for the industry, according to NZF Money chief operating officer Adrienne Smith. The company has recently started promoting sales of KiwiSaver to mortgage brokers through a tie-up with investment management company Huljich Wealth Management.
NZF has set up its KiwiSaver campaign for brokers on the basis that they are giving information on the products rather than advice.
But Smith says that NZF believes KiwiSaver would fall within Category One of the proposed regime. However, NZF's business partner, Huljich Wealth Management, would apply to become a certified finance institution and mortgage brokers would 'fit in' under this certified institution model.
"The fundamental principle underlying certification of institutions is that the institution is responsible for ensuring that advice tendered by its employees and agents is appropriate to the needs that the advice is serving."
New Zealand Mortgage Brokers Association chief executive Megan Salt does not expect traditional mortgage broking to be classed as an activity requiring full authorisation.
Salt expects that most NZMBA members, for the bulk of their businesses would fall into the category two group and would not have to be authorised. But Professional Advisers Association chief executive Dave McMillanbelieves that it is not clear whether mortgage brokers will have to be authorised.
McMillan says that he expects any "multi-sector" brokers to be considered category one advisers.
He also expects that brokers who want to be seen as home loan advisers would want to be authorised in category one. Category two appeared to be intended for "over-the-counter" type products.
