Photo: RNZ
The Commerce Commission is set to reveal its eagerly awaited final report into competition in the retail banking sector on Tuesday.
Its draft report found the sector lacks competition, with a two-tier market dominated by the big four Australian-owned banks, ANZ, ASB, BNZ and Westpac.
The report suggested that the sector lacked disruptive forces to drive change and deliver benefits.
It stopped short of calling for a break-up of the big banks, and there was little indication a drastic measure might emerge in the final report.
The draft report also recommended the government look at ways to beef up [https://www.rnz.co.nz/news/business/524216/how-a-kiwibank-sale-might-work
Kiwibank] by increasing its capital.
When it came to competition for home loans (retail banks' biggest business), the commission noted that price matching behaviour by the big players reduced incentives to compete hard on interest rates.
But the Finance and Mortgage Advisers Association's country manager, Leigh Hodgetts, said the interest rate environment was competitive in New Zealand and the commission needed to better understand how advisers could help.
"The benefit of [having a] better understanding by the Commerce Commission is how mortgage advisers help consumers or borrowers to help to get a better deal from the bank," she said.
Hodgetts said better deals could be around interest rates, finding out benefits for borrowers, better terms or cash backs.
Hodgetts previously criticised the commission for "not understanding" how the advisor sector operated.
A particular sore point for mortgage advisers was the commission saying advisers might face a conflict of interest with their clients because of certain incentives to recommend a lender.
Hodgetts would like to see the comments removed, saying advisers worked for their clients, not the banks.
She said the association met the commission following the draft report's release and provided feedback about how the mortgage and finance advisory sector worked.