Mortgage broker peak body responds to Labor statement on broker reforms

The peak body representing mortgage brokers has welcomed Labor’s statement on reforms for brokers saying it will ease some of the mental health duress being felt throughout the nation. Finance Brokers Association of Australia managing director Peter White said the announcement provides some much-needed clarity for brokers moving forward, while also ensuring transparency on commissions. “We will continue dialogue with both sides of politics to further shape the end model so that the borrower wins and competition in the market is maintained. “Labor’s decision to scrap trail commissions and standardise commissions at a fixed percentage of loan size is positive but there needs to be more work done around clawbacks. “There needs to be some protective mechanism in place, and that will be one of the key issues for us moving forward.” Mr White said the government and Labor were aligned in many of their responses to the royal commission but not all. “Both sides of politics should be congratulated for their willingness to listen to the industry but those talks are not over yet,” Mr White...

FBAA hits back at forum quitters

The Finance Brokers Association of Australia (FBAA) has hit out at “so-called consumer groups” for withdrawing from an industry forum at a time of great importance to the industry. FBAA managing director Peter White accused the quitters of a ‘huge dummy spit’. “Since when do legitimate advocates take their bat and ball and go home because they disagree with others?” It’s been reported that Choice, the Consumer Action Law Centre, Financial Counselling Australia and the Financial Rights Legal Centre have left the forum which exists to improve customer outcomes, preserve and promote competition and improve standards of conduct. “It’s ironic that they are citing the alleged failure of the group to commit to acting in the best interests of ¬borrowers, when that is the very cornerstone of the success of brokers. “The industry has worked well with ASIC, the Productivity Commission and Treasury to bring even greater transparency and accountability. Commissioner Hayne criticised banks for their lack of transparency and culture of greed.” “Choice is meant to stand up for consumers, but they have been found out for having commercial conflicts of interest that may have influenced their reviews. They clearly don’t understand this industry, but they seem to understand vacuum cleaners and dishwashers so maybe they should stick with these. “The FBAA has led from the front in ensuring borrowers’ interests are the primary driver in every case. Not only are we not blocking meaningful change, as claimed by Choice, but brokers are leading the change.” “The big banks will be the big winners if brokers are forced out of the industry, and borrowers will pay more in...

Bendigo Bank urged to look in the mirror before throwing stones at brokers

The managing director of the Finance Brokers Association of Australia has provided some timely advice for the head of the Bendigo Bank – ‘focus on your own performance instead of attacking brokers’. Peter White said Bendigo Bank is wrong to support the Hayne recommendation scrapping commissions to brokers. “It’s timely that Bendigo Bank attacks brokers on the same day they announce weaker than expected first-half profit results. “While the market was watching Bendigo Bank shares plunge 6.8 per cent in value, their managing director was supporting a fee-for-service model for the broking sector – a ridiculous proposition that would return market dominance to the big banks. “Marnie Baker was quoted saying current arrangements enhance the risk of poor or conflicted advice, but she doesn’t seem to understand that brokers do not give advice, they provide credit assistance as described in legislation.” Ms Baker also suggested a lack of competition was a contributor to the system’s woes. “What do you think will happen if brokers are forced out?” asked Mr White. “There will be less competition and the big four banks – not Bendigo – will benefit.” “Perhaps Bendigo Bank’s shareholders would prefer the leadership team focus on boosting their own results rather than firing shots at brokers who focus on the needs of borrowers, rather than the profit margins of...

FBAA tells MPs and media that brokers are the key to better consumer outcomes

The Finance Brokers Association of Australia (FBAA) has warned both the Federal Government and Opposition that they would be betraying borrowers if the remuneration structure for brokers was changed. FBAA managing director Peter White, who has been prominently featured across national media yesterday and today, told Sky News that if implemented, the recommendations from Commissioner Kenneth Hayne would send Australia back to the dark ages where a few banks held all the power. Mr White also pointed to comments from respected finance commentator Peter Switzer who called the royal commission’s plans for mortgage brokers “crazy”. “The broking sector has undergone reviews from ASIC and the Productivity Commission and each time the recommendation has been not to change the structure,” Mr White explained. The FBAA head has waged a non-stop media campaign from Parliament House in Canberra where he has been since yesterday’s lockup, with a simple message – “Mortgage brokers provide competition and choice, and give borrowers lending options that most people are just not aware of, and these options enable borrowers to get better outcomes.” He also said commentary that criticised broker commissions was misinformed and hypocritical. “Talk about conflicted commissions misses the point, as every business person’s remuneration is conflicted because everyone wants to do business. “The issue is transparency, and brokers already disclose commission under the National Consumer Credit Act, which was established after lobbying from our industry. “Unlike the banks which have done business for years under a shroud of secrecy, the broking industry has pushed for openness and transparency, better business practices, and tough penalties for any broker that does the wrong thing.” He...

Mortgage brokers key to better consumer outcomes

The national peak body representing finance and mortgage brokers has warned both the Federal Government and Opposition that they would be betraying borrowers if they change the remuneration structure for brokers. Finance Brokers Association of Australia (FBAA) managing director Peter White said if implemented, the recommendations from Commissioner Kenneth Hayne would send Australia back to the dark ages where a few banks held all the power. Mr White pointed to comments from respected finance commentator Peter Switzer today who called the royal commission’s plans for mortgage brokers “crazy”. “The broking sector has undergone reviews from ASIC and the Productivity Commission and each time the recommendation has been not to change the structure,” Mr White explained. “Mortgage brokers provide competition and choice, and give borrowers lending options that most people are just not aware of, and these options enable borrowers to get better outcomes.” He also said commentary that criticised broker commissions was misinformed and hypocritical. “Talk about conflicted commissions misses the point, as every business person’s remuneration is conflicted because everyone wants to do business. “The issue is transparency, and brokers already disclose commission under the National Consumer Credit Act, which was established after lobbying from our industry. “Unlike the banks which have done business for years under a shroud of secrecy, the broking industry has pushed for openness and transparency, better business practices, and tough penalties for any broker that does the wrong thing.” He said talk that the current system incentivises brokers to write higher loans is “just rubbish”. “The average broker-written loan is $30,000 higher than the average bank-written loan for a variety of reasons which...

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