Stronger together

From the Australian Broker Magazine – 20th November FBAA managing director Peter White on the launch of the International Mortgage Brokers Federation Financial regulators often collaborate across borders to share knowledge and….. read full article...

FBAA announces new state presidents and councillors

The Finance Brokers Association of Australia (FBAA) has announced its new state presidents and councillors for 2019, with a strong and dynamic team set to serve the industry. Felicity Heffernan is the newly elected president for New South Wales and the Australian Capital Territory, bringing 30 years of finance experience to the role. Ms Heffernan said she is eager to give back to an industry that has been good to her for many years, and have a voice that helps shape the broking industry now and into the future. The president for Victoria and Tasmania is Brendon Kurtz, who in 2011 bought into Outsource Financial, the largest privately owned and independent aggregator in Australia. He said his main objective for 2019 is to continue bringing high quality professional development to both metropolitan and regional areas of Victoria and Tasmania. Christine Green has been reappointed president for Queensland and Northern Territory for the fourth year, bringing over 20 years experience in banking and finance. South Australian president Joff O’Shannessy is back for the fifth year. He has been a finance broker for more than 23 years, running his own business for 18 years. Trent Carter has been reappointed Western Australian president, and is aiming to have wider reach across the local industry by having council representatives from residential, commercial, asset, regional, licence holders and ‘new to industry’ members. Mr Carter said he is excited to develop more frequent, smaller events targeted to industry niches, delivering locally relevant content. Peter White, managing director of the FBAA congratulated all elected state presidents and state councillors for 2019, and is looking forward to...

FBAA responds to interim royal commission findings

The Finance Brokers Association of Australia (FBAA) has lodged its response to the interim report of the royal commission into the banking, superannuation and financial services industry. The commission tabled its interim report on September 28, 2018 providing interested parties with a month to make submissions in response. FBAA managing director Peter White said their substantive submission focuses on disclosure obligations, remuneration structures, compliance with existing laws, and the commission’s call for greater regulation. “The association agrees with the commission’s interim report that improvements can be made but we also agree that new laws or regulations aren’t necessarily the answer. “Some of the responses to the royal commission have verged on emotional or value proposition statements, and while most have merit we have deliberately taken a strong legal approach to our language to ensure our messages are clearly understood by the commissioner, a High-Court Judge.” One area addressed in the submission is the issue of full disclosure of remuneration paid to brokers by financiers. The FBAA submission rejected any suggestion of a need for further disclosure measures. “Already brokers have to provide lengthy disclosure documents, while the National Consumer Credit Protection Act 2010 (NCCPA) ensures clients are well-informed about the costs and commissions. “We don’t want brokers to be forced into even more documentary disclosure and that view accords with ASIC’s findings that consumers can disengage because of information overload.” The association takes on the issue of broker remuneration concluding that the current structure is superior to other models and any change may be detrimental. “We are concerned that a change to the existing structure without fully understanding the impact...

Brokers urged to check professional indemnity insurance cover

The Finance Brokers Association of Australia (FBAA) has warned brokers to review their professional indemnity (PI) insurance in response to an increase in award limits to be introduced by the Australian Financial Complaints Authority (AFCA). In May the minister for revenue and financial services authorised Australian Financial Complaints Limited to establish and operate the AFCA. The AFCA board has been working with the Credit and Investments Ombudsman board in the transition to the new body while also collaborating with the Superannuation and Complaints Tribunal and the Financial Services Ombudsman. The new arrangements are in place from November 1, 2018. FBAA executive director Peter White said AFCA has forecast an increase in the award limits from the current maximum of $323,500 for any one claim, to $500K. “This change means that unless brokers review and potentially increase their PI insurance levels they may not be adequately protected should a claim of this type be made after November 1,” Mr White said. However, he said brokers who have policies with FBAA’s preferred PI Insurance provider, Insurance Advisernet Australia, will be protected. “We have received written confirmation that the ‘Finance Brokers PI Plus Policy’ with Insurance Advisernet will be altered to cover EDR awards up to $500K for any one claim or up to $1M in the annual aggregate for all new policies and/or renewals issued as from November 1, 2018.” “It means any existing member’s policies that fall due for renewal after this date will benefit from an automatic increase to the above limits for no additional premium charge.” Mr White encouraged brokers with questions to contact Insurance Advisernet national product manager,...

FBAA disputes mortgage broker payments breach the NCCP

The Finance Brokers Association of Australia (FBAA) has rejected claims in the royal commission interim report that lenders paying value-based upfront and trail commissions could be in breach of section 47(1)(b) of the National Consumer Credit Protection Act (NCCP). FBAA executive director Peter White said the interim report did not find any systemic evidence to suggest that conflict of interest in the payment of commissions to brokers directly disadvantages clients. Mr White also took exception to any suggestion that loans sourced for clients with higher leverage are in themselves a bad thing. “It’s the brokers duty to put the client’s interest first and to meet, if not exceed, their expectations. “In meeting client needs brokers are often asked to source higher leverage loans to appropriately support their needs, taking into account a client’s debt levels and loan to valuation ratios. “It’s a broker’s ability to source a specific loan product to suit their client’s specific needs that gives us a market advantage.” In his interim report commissioner Hayne said licensees must make adequate arrangements to ensure clients are not disadvantaged by any conflict of interest that may arise in relation to credit activities. Mr White said adequate arrangements are already in place and so are penalties. “The commissioner pointed out that a breach of the NCCP is not an offence or open to civil penalty. I would argue that the cancellation or suspension of a broker’s licence by ASIC is a substantial penalty in itself.” Mr White said brokers were at the forefront of efforts to improve service delivery and remuneration structures and have been working collaboratively with...

OnDeck Expands Further into Australian Equipment Finance Market

Funding structure enhances small business growth capabilities OnDeck Capital Australia (OnDeck), a subsidiary of the US-listed OnDeck Capital, today announced it will expand availability of its equipment finance solution, representing another example of how fintech lenders are successfully identifying and filling the small business funding gap. Mr Cameron Poolman, Chief Executive Officer of OnDeck Australia, said brokers often speak to OnDeck about the challenges they encounter obtaining traditional finance solutions for non-primary assets. “These include assets such as catering equipment, gym equipment, racking, IT, food processing and fit-outs, which mainstream financiers will not finance because of the asset type or its age, says Poolman. “Currently, to purchase these types of assets, many small business owners must resort to using their valuable working capital or turn to family and friends. Often the purchase simply doesn’t happen and that limits the development or even the ongoing operations of the business”. Mr Poolman said that what distinguishes OnDeck funding solutions from traditional lenders is its focus on the future potential of the business. “We want small business in Australia to succeed. To do this, we must support and invest in solutions for them. Our focus is on a small business owner’s overall financial health, and not just purely on the short-term resale value of its business assets. As such, our equipment finance solution places no maximum age restrictions against any asset class. It provides small business the finance to purchase necessary equipment, frees up cash and gives owners more opportunity to focus on what’s best for their business.” OnDeck’s research has shown that one of the main reasons small business borrow from...

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