Media Releases

Productivity Commission report released

Today the Productivity Commission released their final report into competition in the Australian Financial System, and yes, we are not happy with it at all. Firstly, it is important to note the Productivity Commission (as the Royal Commission) can only make recommendations to government, the decision is with the Federal Minister whom I have been in contact with her office this morning and of course will continue close dialog on this matter with government and the Opposition. For now and as we read the ‘headlines’ of this report, there are many things that simply show the Productivity Commission has chosen not to accept facts and would rather make comments that simply are not correct. We will ensure these matters are corrected and clearly and firmly positioned with the Federal Minister as well as several other key Senior Ministers in the government and the Opposition in our response paper to this report, which we are working on as we speak. Thank you to all those who have called me and emailed me with your concerns and I am working through responding to all of you over the weekend. But I ask that we all take time to digest all this before we comment on specifics or start making any public statements. This time will shortly come however. I will come back to you shortly with our formal media release on this, plus I will keep you up to date as we go through the steps in responding formally to government on this...

Mortgage Brokers increase competition and choice, driving lower interest rates: Deloitte Access Economics

24 July, 2018: A Deloitte Access Economics report released today has found that mortgage brokers drive more competitive mortgage pricing, provide valuable services and greater choice for consumers. The average mortgage broker has access to 34 different home loan lenders, and of these they use an average of 10 lenders to settle loans based on their customer’s choice, financial circumstances, needs and preferences. Mortgage brokers drive competition in the lending market by providing access to a wide range of lenders – not just the major banks or their affiliates – helping to drive down interest rates for all Australian home buyers and investors. The report, titled The Value of Mortgage Broking, which was commissioned by the Mortgage Broking Industry Group (MBIG), revealed that more than half of all home loans each year are originated by mortgage brokers – and this number continues to grow. In addition, the market share of broker-originated loans for lenders who are not major banks or their affiliates has increased from 21.4 per cent to 27.9 per cent in just four years, highlighting the competition being driven by brokers. Mortgage & Finance Association of Australia CEO, Mike Felton, said that the report provided important insight into the industry and the value it provides to everyday Australian homebuyers – particularly in helping to drive lower interest rates for all consumers, not only those who use a broker. “The mortgage broker channel has made home loan financing cheaper for all Australians. While not only providing homebuyers with access to more residential lending options, mortgage brokers have contributed to a fall in net interest margins of more than...

ABC broker clarification not enough

A clarification earlier this month by the ABC of incorrect information broadcast about mortgage broker qualifications does not fix the damage done to the industry’s reputation, according to the Finance Brokers Association of Australia (FBAA). In March, on the back of misinformed reporting during the banking royal commission, the ABC’s chief economic reporter Emma Alberici stated during an episode of the clearly inappropriately named “Matter of Fact” hosted by Stan Grant, that “anyone can set themselves up as a mortgage broker, even a gym owner”. FBAA executive director Peter White, who at the time called on the ABC to “publicly correct the record and apologise”, says the comments were clearly wrong and that Ms Alberici confused a bank’s “introducer program” with professional mortgage brokers. The ABC on June 1 finally issued a clarification on a section of their website that few would even be aware of, as follows: “Matter of Fact with Stan Grant: On 13 March, a discussion about the day’s events at the Financial Services Royal Commission included incorrect references to mortgage brokers.  The ABC acknowledges that there is a regulatory scheme that applies to mortgage brokers and that ASIC has set minimum education requirements for brokers who provide third-party home loan credit assistance.” However Mr White said this so called correction “on an obscure webpage that no one will read”, is an affront to thousands of small business owners who are finance brokers and provide a highly professional service under a strict regulatory environment. “How such a high profile journalist can get away with such blatant misrepresentation of the facts and not be held to more...

Over 1000 to gather for FBAA 2018 conference

The Finance Brokers Association of Australia’s (FBAA) conference has not only cemented itself as the largest annual finance industry event in the nation, but the gala dinner also makes it the most glamorous! Held at Sea World on the Gold Coast on Friday November 16, it will be followed by the dinner which will incorporate the ‘Awards of Supremacy’ recognising broker achievements, and then – for those still with energy – the Firstmac after party. FBAA executive director Peter White says the conference will benefit all who attend, not only due to the inspiring speakers, but from the opportunity to network with other industry professionals from across Australia. “This year’s theme is ‘evolution’, and without sounding like a cliché, I think we can accurately say that we are at a time of great change, and the industry must evolve if we are to grow stronger,” Mr White explained. The conference will focus on changes to the industry in many areas including technology, consumer behaviour, and – in the shadow of the banking royal commission – regulation. A representative from ASIC will provide an update, and industry heads will take part in a panel to answer questions on where the industry is headed beyond the royal commission. However Mr White said it’s far more than a talkfest, but also “an amazing weekend away”. “Last year we had over 180 families come and enjoy Sea World, and we offer child care facilities during the gala dinner, so it really is something for the entire family. “And don’t think of the gala dinner as being remotely similar to anything you’ve experienced before;...

Budget should boost confidence and property – Finance brokers peak body

The peak body representing Australia’s finance brokers believes the federal budget will help the property market through increased consumer confidence, while also acknowledging it did not address housing affordability directly. “What helps the housing market, associated industries and the economy overall, is confidence around interest rates and superannuation and a little extra money in people’s pockets,” said Finance Brokers Association of Australia (FBAA) executive director Peter White. He pointed to removing some of the tiering tax brackets in coming years, tax cuts, superannuation changes and infrastructure spending as positive measures. “Any budget that provides hope in both the economy and the nation’s direction, and doesn’t create fear, can only be positive for our industry, because people are willing to spend and invest. “When people are buying property, the entire economy from large to small business, benefits.” Mr White also said the tightening of phoenixing laws and crackdown on cash economies are also good measures. “It’s clearly an election budget, but also one that will likely make people feel...

Budget funds regulators, but overall good for consumer confidence – FBAA

The Finance Brokers Association of Australia (FBAA) says the federal budget’s allocation of more funding for APRA and ASIC that is linked to outcomes from the banking royal commission, means that brokers should be prepared for action from regulators. FBAA executive director Peter White said while the impact on brokers is unlikely to be major, the industry must be prepared for some changes. “Regulators are being funded for action, and there is no doubt that findings from the royal commission will compel them to act decisively. However while he isn’t sure how much action will be directed towards the broking sector, he said, “I firmly believe it will not be life-changing. “Over recent weeks, revelations around the behaviour of banks have been quite sensational, so I’d suggest much of the focus will be on those matters.” Mr White also said the budget impact overall should be mainly positive for homebuyers. “While we always want to see more, any budget that provides confidence, gives people more money in their pockets, and doesn’t scare people around issues like superannuation, can only be positive for our industry.” He said the tightening of phoenixing laws and crackdown on cash economies are also positive measures. “It’s clearly an election budget, but as long as people feel secure they will spend and buy property, which is good for the...

Finance brokers call for perspective on broker remuneration

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...

PI risks increasing and brokers should check cover

The Finance Brokers Association of Australia (FBAA) has warned brokers to ensure they hold adequate professional indemnity (PI) cover, citing an increase by ASIC of the maximum claim that can be awarded by an approved External Dispute Resolution Facility (EDR) and the current publicity around the finance broking sector. The claim amount was lifted from $309,000 to $323,500 at the beginning of this year and the FBAA says there has been little advertising around this, so many insurers likely would not have addressed the issue as yet. FBAA executive director Peter White said members should check with their insurers and aggregators to ensure that they are adequately covered for the new increased limit. “We also know what lawyers are like, and are concerned that risks to brokers have risen in the current environment, notwithstanding that there are no legitimate reasons for claims to increase.” Insurance Advisernet (IA) is the preferred PI provider to FBAA members, and spokesperson Darren Loades said their ‘Finance Brokers PI Plus’ policy has already been amended to cater for this increase. “If you’re unlucky enough to be involved in a PI claim these days, approximately 90 per cent will be lodged via an EDR Facility so brokers need to ensure that their policy meets the current requirements,” he explained. He said while IA’s policy has a nil excess on EDR type claims, not all policies are the same. “Brokers need to know what type of excess they will have to pay and if that’s affordable for them. “If brokers are not aware of the risks and obligations on their PI policy, they could end up...

Peter White and Graham Richardson

Peter White and Graham Richardson talk on the Richo Show podcast, Sky News Channel – Wednesday April 11th 2018 https://www.fbaa.com.au/wp-content/uploads/2018/04/b1db43-richo-wednesday-11th-april_1.mp3  ...

Turn customers into industry advocates – FBAA

Finance brokers can play an important role in correcting misinformation about the industry that has been widely reported due to the banking royal commission, according to the Finance Brokers Association of Australia (FBAA). FBAA executive director Peter White says many brokers are concerned about the effect public comments from banking representatives and others over commissions and broker practices will have on their businesses. He said while the FBAA was strongly advocating on a national level in the media and directly to government and regulators, brokers can communicate directly to their customers. “Now is the time to change the conversation and focus on consumer outcomes, by reinforcing the benefits of brokers to our customers through words and actions,” he said. “Nothing customers read or hear in the media will influence them away from their finance broker if they are entirely satisfied with the level of product and service they are receiving.” He said that high levels of service will turn customers into advocates for the broking sector. “Brokers should be regularly communicating with their customers through e-newsletters and social media, providing the sorts of tips, advice and information that people will never get from a bank. “Maybe even clarify with customers some of the misinformation in the media, like the difference between ‘referrers’ and professional brokers, which was so poorly misinterpreted by journalists who should know better.” Mr White said the industry must have one voice heard in many locations, and it’s time to increase the volume. “This is the moment for industry unity, with associations working on one level and members on another. “Banks have tried to divert the...
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