The Finance Brokers Association (FBAA) of Australia has labelled the current commentary around the broking sector and the number of inquiries unprecedented, unnecessary and crazy.
FBAA executive director Peter White says the reaction of some journalists and other ill-informed commentators is disproportionate to the issue and that the Productivity Commission, ACCC and Royal Commission are falling over each other in their quest for profile, while ASIC only recently conducted a comprehensive review which is with the minister.
“I have never seen such craziness around our sector, and this is leading to reactionary comments rather than considered approaches,” he said.
Mr White said the industry has been undergoing a process of reform directly with the regulators for the past couple of years, all with the aim of better consumer outcomes.
“There is not really a problem, but these multiple inquiries and statutory bodies have to justify their existence and fat pay packets by kicking someone, and at the moment it’s finance brokers.
“Let’s keep in mind that consumers are not complaining; we know they are happy with the current system because they are voting with their feet and overwhelmingly choosing brokers.”
He said ASIC’s own reviews indicated that a flat fee structure replacing broker commissions would present an entirely new set of problems.
“Unfortunately, with all these voices being driven by self-interest, it’s easy to think something needs to change or be fixed when it doesn’t.
According to Mr White, brokers should also avoid reacting to quotes attributed to banking bosses in news reports, because it’s easy to edit part of a comment and use it out of context.
“While the sound bites from the banks have raised some eyebrows, their submissions except for one bank to the royal commission indicate support for the current system, which isn’t surprising because it’s better for banks, brokers and borrowers.”
He said he hopes there will now be less speculative reporting, because the industry needs a more rational and informed discussion.