Media Releases

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...

Finance brokers slam “hysterical and misinformed” royal commission reporting

The peak body representing Australia’s finance brokers says some of the commentary around brokers from the banking royal commission is not only sensational and misleading but seeks to disparage an entire industry made up of predominantly small business owners. The executive director of the Finance Brokers Association of Australia, Peter White, said some of the reporting displays a lack of understanding of the sector. “Journalists have confused terms like ‘introducers’, which is a program run by some banks, with finance brokers, who are industry professionals. “We had the ABC’s Emma Alberici incorrectly state on national TV that a gym owner can set themselves up as a mortgage broker, implying that no training or qualifications are necessary, which is ridiculous. “We’ve had an article by an economics writer calling for mortgage broker commissions to be scrapped and part of the stated reason was remuneration that the industry has already eliminated.” Mr White said mortgage brokers were qualified, new brokers received years of mentoring and all brokers undergo ongoing development for their entire career. He said it is ignorant for anyone to imply that a few people who do the wrong thing represent an entire industry, or that brokers are not professional and skilled. “Finance brokers ensure the loans are not unsuitable for their clients, can access a wide choice of products, provide expertise, offer experience and give excellent service. “Our industry is offering consumers what they don’t receive at the banks. “Consumers are not paying more or disadvantaged by using a broker, but on the contrary enjoy an advantage over direct bank customers. He said that like in any industry...

ABC and Emma Alberici get it very wrong on mortgage brokers

The Finance Brokers Association of Australia (FBAA) has accused the ABC and its controversial chief economic reporter Emma Alberici – who was recently criticised by business groups and the Prime Minister over comments about corporate tax – of misrepresenting the qualifications of finance brokers, saying she owes the thousands of hard working brokers across the country an apology. During an episode of the clearly inappropriately named “Matter of Fact” hosted by Stan Grant, Alberici claimed that “anyone can set themselves up as a mortgage broker, even a gym owner”, as she confused a bank’s “introducer program” with professional mortgage brokers. FBAA executive director Peter White said finance brokers work within a very strict regulatory environment and all brokers must have at least a Cert IV in Financial Services (Finance and Mortgage broking), though many have higher degrees, be mentored for two years and continue ongoing training. “Entry into this industry could be described in a way like a traineeship, where brokers receive a combination of theory and formal training, plus guidance and on-the-job training, as well as ongoing development for their entire career. “As those within the industry are aware, training never stops, and in fact is mandatory for brokers to meet their regulatory and association requirements.” He said the banking royal commission has focused on some introducers and brokers in its first few days, but it is ignorant and unprofessional for any journalist to imply that a few people who do the wrong thing represent the entire broking sector, or that the industry is not professional and skilled. “The media must be careful how they report from the...

Industry working hard for positive profile, says FBAA

The executive director of the Finance Brokers Association of Australia (FBAA) says notwithstanding current media coverage around the Banking Royal Commission, which will need to be addressed specifically and carefully by the industry, the broking sector receives predominantly good publicity and is clearly trusted by consumers, thanks to the public profile of industry participants. Peter White was referring to a recent article in The Adviser that quoted a broker who believes the industry is being portrayed in a negative light. “It’s human nature to be sensitive to negative pieces written about the industry you are involved in, but when you look at the evidence, our industry is well regarded to the point that now around 56 per cent of mortgages come via this channel. “If the public perception was negative this would not be the case.” Mr White pointed out that he regularly provides comments and represents the industry to all of the major media organisations across the country. “The FBAA is very proactive in the mainstream and finance media space, across TV, radio, print and digital, and just recently was featured on the front page of the AFR. “Almost all stories I am involved with are positive and informative, but I will also always defend the industry when needed, and will do so throughout the Royal Commission.” He said the association reacted to recent comments by consumer group CHOICE, as well as comments from the chair of the Productivity Commission. https://www.theadviser.com.au/breaking-news/37418-fbaa-slams-choice-highlights-the-benefit-of-trail However he pointed out that bad behaviour by a minority of brokers will attract negative publicity, which is why the FBAA is vigilant in ensuring brokers adhere...

We need more women!

The Finance Brokers Association of Australia (FBAA) is planning ways to attract more women to the industry, revealing that the percentage of female brokers is significantly below the overall percentage of women in the financial services sector. FBAA executive director Peter White says that for years the industry has been talking about the need for new brokers to meet increased demand and to replace retiring brokers, but has neglected to properly focus on half of the potential workforce. He said that while ABS statistics show that in the overall financial services sector, women represent 55 per cent of the workforce, only 29 per cent of FBAA members are women, a figure that is indicative of the industry as a whole. “I think this may reflect the origins of finance and mortgage broking, as brokers visit people in homes after hours, which may not suit a lot of women. But times are changing,” he added. He said technology now allows brokers to do interviews by video, but customers and lenders still prefer face to face encounters. “Personal service will never be compromised by our industry because that’s what sets us apart and has contributed to brokers writing around 56 per cent of mortgages, but it’s time to educate the market and lenders to use modern resources which brings flexibility not only to clients, but to finance broking professionals.” He said women considering entering real estate and other similar careers due to the flexibility and rewards, should consider finance broking. “The FBAA has been very proactive over recent years in attracting younger people to the industry, and the fact that so...
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