Mortgage Broker, Mortgage Adviser, Financial Adviser – Are These The Same Things?
Most of you will have heard the term ‘mortgage broker’ and to be honest, that’s the term the majority of people use to describe someone who is the conjoint between someone wanting funds to purchase a property and the lender.
You may have also heard the term ‘Mortgage Adviser’ and ‘Financial Adviser’, but are these all the same things?
A Mortgage Broker, by way of definition is “an intermediary who brings mortgage borrowers and mortgage lenders together, but who does not use their own funds to originate mortgages. A mortgage broker helps borrowers connect with lenders and seeks out the best fit in terms of the borrower’s financial situation and interest-rate needs.
The mortgage broker also gathers paperwork from the borrower and passes that paperwork along to a mortgage lender for underwriting and approval purposes. The broker typically earns a commission from the lender at closing.”
The term ‘mortgage adviser’ may also be used, as ultimately, they play the same role as a ‘mortgage broker’. While the term ‘financial adviser’ is broader and refers to someone who is providing financial advice, of which mortgages is one component of this. However, going forward you’ll start to see the term ‘financial adviser’ be used instead of mortgage broker, and come the end of March 2023, the term ‘mortgage broker’ in New Zealand will not be allowed to be used by financial providers but instead, ‘financial adviser’.
Why the change?
It’s all to do with the new licensing system that Financial Markets Authority (FMA) – Te Mana Tātai Hokohoko have introduced. Anyone who gives regulated financial advice to retail clients is required to either hold or operate under a Financial Advice Provider licence. The FMA have given people a transition period to complete this process. Currently 86% of financial advice providers in New Zealand have now embarked on or completed the full application process.
Rapson Loans & Finance is one of the providers who has already completed the full application process.
The new application process means financial advice providers must meet the competence, knowledge and skill requirements of the code of professional conduct for financial advice services. This is good news for the consumer, as you can have some certainty that the person you are working with to provide such advice, actually meets the standards to be providing such advice. And mortgages and purchasing a home can be one of the biggest decisions of your life, so you want to know you’re in safe, trusted hands.
Whether we’re called Mortgage Brokers, Mortgage Advisers or Financial Advisers, you can rest assured when you work with Rapson Loans & Finance, you’ll be getting the best solution for your needs. While our title will change, our service and commitment to helping you achieve your financial goals will remain the same.