Speaking to InvestorDaily following the announcement of the sale of CUA FP to IOOF-aligned licensee Bridges Financial Services, CUA’s Chris Whitehead said there should be greater oversight of vertically-integrated ownership structures in the advice and mortgage aggregation markets.
“We have actually raised this concern with the ACCC,” Mr Whitehead said.
“Their response was that really financial services competition is governed by ASIC,” he said.
“You go to ASIC and they say they don’t have any specific brief with regards to disclosure standards, so there is no specific requirement to disclose ownership under any legislation.”
Mr Whitehead pointed to Westpac’s ownership of St George and Bank of Melbourne, and CBA’s ownership of Bankwest and Aussie as examples of multi-brand strategies that potentially mislead customers.
“Customers don’t really understand whether they are dealing with a major bank or an alternative challenger such as CUA with this kind of confusion – that’s a concern for us,” he said.
“At the moment, there appears to be a bit of a vacuum with the ACCC not getting involved in financial services and ASIC having something of a different brief,” he said.
On the issue of bank-owned aggregators, Mr Whitehead believes the majors are using their ownership powers to gain detailed information on their competitors.
The comments come as the Customer Owned Banking Association called on the government to curb the “deep vertical integration that has evolved over the last decade in the financial services market” in a report compiled on its behalf by consulting firm Macroeconomics.
The report reviewed the four major banks’ annual reports between 2004/2005 and 2012/2013 – as well as relevant IBISWorld industry reports, singling out CBA and NAB for oligopolistic behaviour.
