The Finance Brokers Association of Australia (FBAA) says a report of excessive remuneration being paid to brokers is way off the mark and damaging to the industry during this sensitive period of regulatory reform into commissions.
Columnist Tony Boyd – who has written articles criticising brokers in the past – claimed in the Australian Financial Review (AFR) that broker commissions totalled around $300 million in the September quarter last year in upfront payments to brokers.
But the FBAA’s Peter White says if those numbers are correct, when you divide the total into the number of brokers Australia-wide, you are looking at a monthly gross income of around $4,166.
“That represents an annual income of around $55,000 which honestly can hardly be considered ‘over-the-top and excessive when the average Australian yearly income is around $70,000”.
Mr White says hard-working brokers who put in extra hours to get as many loans as possible across the line do earn more but when you take into account the time spent, the remuneration is commensurate with national standards.
“This AFR piece from a columnist that clearly has an agenda was totally misleading and even malicious and gave the impression that brokers are blatantly ripping off customers. Self-employed people have a right to earn as much as they can just like anybody else.”
“Trailing commissions too have been unfairly maligned,” said Mr White. “The truth is they take time to accumulate and a year’s gross trail can never be seen as excessive or wrong by anyone’s standards.”
The FBAA is concerned this type of unbalanced article can have serious implications on the ongoing review by Australian Securities and Investments Commission (ASIC) into broker commission structures.
“Brokers now account for nearly 54 per cent of all loans written so we must be doing something right.”