Brokers should be heartened by the wide and open consultative approach undertaken by the industry regulator currently looking into commissions for brokers in the home loan sector.
That’s the view of Peter White from the Finance Brokers Association of Australia (FBAA) who has been part of several pre-emptive teleconferences and face-to-face discussions with the Australian Securities and Investments Commission (ASIC).
The ASIC Stakeholder Roadshow, which took place in Sydney and Melbourne, had been looking into the scoping of this review before the Commission begins its data discovery undertakings.
Mr White was delighted a broad cross section of the broking distribution chain had been invited to ASIC’s discussions which included around 14 FBAA members. Lenders, aggregators and single licence holders were also at the table.
“From the discussions, it was clear the regulator had no preconceived outcomes in mind and they asked pertinent questions relating to the parameters and relevance of the proposed scoping of this review, and input relating to the influencing factors and structures of commissions in the home loan sector.”
“More importantly, this was an opportunity by the industry to ask and submit questions relevant to last year’s Financial System Inquiry which among other things probed remuneration structures and the similarities, or lack of, with other instruments like insurance or financial advice.”
Mr White says the ongoing discussion about remuneration models was high on the agenda but feels ASIC is keeping an open mind about any changes in commission structure which would have profound change for the industry and borrowers, as any negative outcome would most likely have a knock-on effect to borrowers and possible home loan lending costs.
“We’ve seen the outcomes with what happened to financial advisers with the “Future of Financial Advice” (FOFA) reforms but it must be said again, the two industries are worlds apart.
“Brokers give educated guidance, facilitate outcomes and aren’t in the business of this sort of advice. As long as everything is transparently and legally disclosed and upfront, there should not be an issue with the outcome of this review.”
Media Contact: Ben Dobson – 0434 791 084