18th July 2019

Choice exposes its lack of knowledge with broker training comments

Yet another attack on mortgage brokers from consumer group Choice should not only be dismissed outright, but reveals the groups disturbing lack of real understanding about the broking sector, according to the Finance Brokers Association of Australia (FBAA).

FBAA managing director Peter White said criticism of broker training is unfounded, revealing that training never stops.

“This myth being peddled by Choice and a few others at the recent royal commission that a short online course can qualify someone to be a finance broker, is completely false.”

He said the industry sets a high bar for finance brokers and the initial course is just the start.

“A Certificate IV is the right entry point to a continual lifetime of learnings, including mentoring for two years minimum which can be extended if necessary.

“Continuing professional development goes forever at a minimum 25 hours per year for FBAA members which is higher than the benchmark set by ASIC.”

Mr White said theory is only a part of the training and learning on the job under guidance is an important part of development.

“Choice is putting too much emphasis on ‘book study’ and their comments show they have little clue about the facts.

“People enter our industry from all walks of life and regularly come from a near zero base of industry knowledge, so it is vital that training covers all forms of consumer lending rather than just mortgages.”

“Having a proper and well-founded base line of knowledge is all important in learning anything new, and you need to know the basics first. This way what is built on top is solid and won’t collapse.”

He said this is not the first time Choice has got it wrong on broker training.

“Choice provides a valuable service for consumers in reviewing vacuum cleaners and washing machines, and they need to stick to what they know” he said.

15th July 2019

Banks urged to respond more quickly to changing borrowing conditions and rates

The Finance Brokers Association of Australia (FBAA) has demanded banks take a more proactive stance in safeguarding the interests of borrowers, citing APRA’s latest guidance on assessment rates for loans as an example.

FBAA managing director Peter White claimed many people who should qualify for a loan have been rejected because they are being assessed on advice from 2014 when the economy and interest rates were very different.

“APRA moved to correct this anomaly ten days ago but some of the banks have been slow in responding. I congratulate the ANZ for moving to a more reasonable assessment position last week and Westpac for following suit today. I urge the other majors to move as soon as possible.”

On Friday ANZ announced that its current floor rate of 7.25 per cent will be amended to 5.50 per cent. Westpac moved from 7.25 per cent to 5.75 per cent and increased its buffer to 2.5 per cent.

Mr White said other banks seem to be resisting, which is holding the economy back when it desperately needs a boost. “Brokers are trying to help buyers purchase a home, but banks have been holding them ransom.”

On July 5 APRA amended its 2014 guidance on residential mortgage lending, stating they now expect banks to assess loans at a rate of at least 2.5 per cent above the interest rate on the loan that is being taken out.

Previous guidance from APRA to authorised deposit-taking institutions (ADIs) was to assess home loan applications using a minimum interest rate of at least 7 per cent with most banks adopting a rate of 7.25 per cent to assess loan serviceability.

“With most lending institutions offering interest rates between three and four per cent an assessment rate on 7.25 per cent was unfair.

“As brokers it makes it more difficult to get approval and creates immense disappointment and confusion for clients if banks use outdated data to assess the suitability of average Australians to pay off their home.”

Mr White said the housing market needs a boost and will get it when the banking sector learns to respond quickly to changing conditions and interest rates.

“The reduction in the assessment rate will make it easier for existing borrowers to refinance so they can escape their existing mortgage prisons because of unreasonable rates and conditions.”

10th July 2019

Finance broker association goes high-tech with global first App

A new era in technology has begun with the launch of a world first web application which promises to revolutionise the way finance brokers manage industry needs including applying for membership and managing renewals, credit and bankruptcy checks, insurance and ombudsmen requirements plus education and training.

The App, which is now live and available globally, removes a substantial administrative task for both staff and member associations with a strategy to offer the technology to member-based organisations around the world over the next few months.

Finance Brokers Association of Australia (FBAA) managing director Peter White said the App provides instant membership approval for both new memberships and renewals, a capability that revolutionises the process.

“As long as all criteria has been met the App takes care of the rest allowing all membership requirements to be driven while the prospective member is keying in the data.

“It also means membership certificates are dispatched in real-time via email so that once the data is in, the membership certificate is in their inbox.”

Mr White said at the heart of the new App was artificial intelligence and optical character recognition technology which increases the capabilities and functionalities as it grows and learns from inputs.

“This impacts the industry as a whole because massive data analytics capabilities actually help drive the future of the business through greater understanding of its membership composition, member needs and specialisation learnings.”

The new technology also helps users to manage and monitor industry requirements and user needs all year round including tracking protection and indemnity insurance issues and compulsory professional development needs.

“The App triggers key dates in the system so when it comes time to renew all you do is click ‘yes’ and the system either runs automatic payments or generates payment at the time of acceptance without headaches or clumsy requirements and more forms.”

The benefits extend past members to aggregators who can use the technology for the on boarding process as it enables them to complete the broker’s association membership component on the spot, enabling the broker and aggregator to complete the needs of the lender and their own needs without the usual one to two week delay or longer in some cases.

IT workers are already developing version two of the new application which will further streamline the system and generate profitability and efficiencies to stakeholders.

2nd of July 2019

FBAA urges borrower caution after second consecutive interest rate cut

The Finance Brokers Association of Australia (FBAA) has urged borrowers to think twice about their next move after benefiting from the second consecutive month of interest rate cuts by the Reserve Bank.

FBAA managing director Peter White welcomed the rate cut but urged consumers not to spend all their windfall. “The Reserve Bank has admitted to concerns about the weakening jobs market and economic growth as well as risks to the global economy. These all point to the need for a cautionary approach.

“The banks need to pass this rate cut on in full and I would urge borrowers to pay some of their debt down by maintaining their repayments at the levels before the June rate cut.

“I understand the need for consumer spending to boost the economy but I also respect the need for Australians to increase their net wealth position and provide some safeguards in an economy which still has some downside.”

20th June 2019

FBAA advises brokers not to sign banks’ financial abuse declaration

The Finance Brokers Association of Australia (FBAA) has demanded that banks walk away from a new requirement that brokers sign a declaration stating they are unaware of borrowers suffering financial abuse, and have advised brokers not to sign any such declaration.

FBAA managing director Peter White says while the association supports moves to prevent people being coerced into a loan, this is a knee-jerk reaction from the banks that requires far more legal and industry consultation.

Noting that the proposed wording hasn’t even been widely released, he said, “To try and ram this through with little notice is not only ridiculous and ill-conceived, but creates massive risks for brokers with almost no benefit to borrowers.”

Mr White said brokers are not psychologists and the suggestion that they can somehow predict if someone is being wrongly influenced to apply for a loan is foolish.

He also believes brokers would be exposed to legal action both from banks and borrowers, and revealed that professional indemnity (PI) advisers have told him that this declaration would not be covered under existing PI terms for brokers.

“My initial information is that PI insurance could increase tenfold to cover a declaration like this. There are so many issues that have not been considered, and banks must put this aside until these have all been addressed.”

He also said that emotional abuse of any kind is a complex subject, and being able to recognise in-depth signs when discussing a mortgage puts far too much pressure on brokers.

“It’s absurd to even suggest that finance and mortgage brokers can do a two-hour or two-day course and suddenly be able to analyse people to the point where they can declare there is no financial abuse taking place.

“The banks are attempting to bring a simple solution to what is a serious and complex issue, and I have to question whether this is more about protecting themselves than the public.”

6th of June 2019

New Australian CPD classes to future-proof broking businesses

Some of Australia’s most talented and successful finance practitioners are about to engage in a series of events aimed at helping brokers broaden their business approach to provide additional income opportunities.

The 2019 Commercial Industry Masterclass will reveal the full potential of a $25 billion segment of the lending industry to brokers, many of whom have not expanded their businesses beyond home loan lending.

Pepper Money head of commercial Malcolm Withers said there are many opportunities for brokers to build their business, and the masterclass, which also offers five CPD hours, will show them how.

“The royal commission and the resulting political debate saw many brokers reconsider whether they had a future, and the upheaval would have deterred some from entering the industry.

“Brokers need to refocus on building their businesses, and commercial and equipment lending is one way they can do that.”

Mr Withers, previously the head of commercial broking for St George Bank for nine years, said this area was underserviced by brokers.

“Whether you are a long-term broker or just new in the market there are wonderful opportunities to satisfy the commercial lending needs of clients. It’s important for brokers to find the best lending solution for their commercial client, and they should be aware that there are options outside the big banks.”

The 2019 Industry Commercial Masterclass is a five-hour course, open to all industry professionals, which will reveal how brokers can succeed in the commercial and equipment finance product space.

“Our presenters include some of the best operators in commercial and equipment finance and they will provide critical advice to help brokers operate effectively in this sector.”

Glenn Mitchell, head of Vow commercial & leasing has worked at commercial lending institutions and within the aggregator broker space for over 30 years.

“If you have ever considered or would like to understand more about the key indicators for commercial lending, this a must-attend training session,” Mr Mitchell said.

 The day will provide information on financials and quality submissions as well as templates for commercial lending.

The series started on June 18 in Adelaide, followed by Perth on June 19, Brisbane June 25, Melbourne June 26 and Sydney June 27.

For bookings visit:  https://www.fbaa.com.au/events/ 

5th of June 2019

Finance brokers association warns borrowers on interest rate cuts

The Finance Brokers Association of Australia (FBAA) has urged borrowers to keep their repayments at current levels despite the Reserve Bank of Australia’s move to cut rates by 25 basis points.

FBAA managing director Peter White has welcomed the first cut in nearly three years and called on the big banks to do the right thing and immediately pass it on rather than boosting their profit margins.

“If the banks refuse to pass this on in full they will reveal they have learnt nothing from the royal commission process,” Mr White said.

However, with economic challenges on the radar Mr White is urging beneficiaries of the rate cut to keep their repayments at current levels to drive down debt.

“Borrowers will effectively be saving for a rainy day if they keep their mortgage repayments as high as they can afford. It’s better to have payments in reserve if conditions deteriorate further.”

Mr White agreed with some economists that there had been some recent positive sentiment, certainly in the housing market but he acknowledged the Reserve Bank has limited capacity to stimulate the economy further with the official rate at 1.25 percent.

“I understand why the Reserve Bank governor Philip Lowe has called for governments to play their part in stimulating the economy but I also see some positives.

“It’s not the time to panic but it is definitely time for prudence,” Mr White said.

28th of May 2019

FBAA welcomes new minister for financial services

 The Finance Brokers Association of Australia (FBAA) has welcomed the appointment of Senator Jane Hume as financial services minister while thanking outgoing minister Stuart Robert for his courtesy, professionalism and commitment to the industry.

FBAA managing director Peter White said he was looking forward to working with the new minister.

“I congratulate the senator for her appointment to the ministry. I am pleased to note that the senator has qualifications in the financial services sector and commerce and has experience in management roles and in directorship positions.

“I will be looking for an early opportunity to meet with Senator Hume to ensure the momentum gained through meetings with Stuart Robert and treasurer John Frydenberg continues.

“We have much work to do to ensure the broking industry continues to provide the competition in the sector that all Australians demand.”

Mr White also congratulated the treasurer for retaining his role. “The FBAA has worked with Mr Frydenberg for many years, initially as financial services minister, then treasurer and we will remain in contact with the offices of both Senator Hume and the treasurer to provide regular feedback from our industry.”

 

23rd of May 2019

FBAA welcomes APRA rethink

The Finance Brokers Association of Australia (FBAA) has welcomed moves by the Australian Prudential Regulation Authority (APRA) to loosen its deemed serviceability requirements that have resulted in banks rejecting many reasonable loan applications.

FBAA managing director Peter White said times have changed significantly since APRA introduced guidance to authorised deposit-taking institutions (ADIs) to test residential home borrowers against an interest rate of 7.25 per cent, or well above a 2 per cent buffer over the loan’s actual interest rate.

APRA provided its guidance towards the end of 2014 when house prices were increasing and there was strong growth in investor loans.

“The end result was most banks were assessing applications against a rate of 7.25 per cent – way above the interest rate for owner-occupiers and investors.”

On Tuesday the prudential regulator gave the industry four weeks to respond to its proposal to remove the 7.25 per cent requirement, allow ADIs to determine their own floor rate levels while increasing the rate buffer from 2 to 2.5 per cent “to maintain prudence in overall serviceability assessments.”

“Brokers have a duty of care to always assess an individual’s capacity to afford the loan they want as part of our commitment to put customers first. But if the guidance is introduced it simply allows us to help more borrowers into properties that they can afford at a time of low interest rates and subdued house prices.

“When you combine the touted change in APRA guidance with the end of the election cycle and the possibility of the Reserve Bank cutting interest rates in June, there are some positive signs for our housing sector in the months ahead,” Mr White said.

“Just eight weeks ago I supported ASIC and APRA in their criticism of the big banks for blaming tough new interpretations of responsible lending regulations and the royal commission for the credit squeeze and delays in assessing loan applications.

“I will be watching the banks with interest to see who they blame next for their shortfalls after the new APRA guidance is issued.”

20th of May 2019

The FBAA looks to the future after Coalition re-elected

The Finance Brokers Association of Australia (FBAA) has congratulated Scott Morrison and the Coalition for their election win and vowed to work with them to ensure borrowers continue to have choice in a healthy financial services industry.

FBAA managing director Peter White said now is the time for brokers to take the handbrake off and hit the accelerator.

“The royal commission findings and the political fallout saw many brokers retreat into a holding pattern, driven by fear about their very financial survival and what that would mean for borrowers.

“Now that the election is over, I want to urge all brokers to commit to doing everything we can to grow our businesses now that banks know we are a force to be reckoned with.

“We currently provide around 60 per cent of home loans and I think brokers have a great opportunity to increase that to 70 per cent in the short to medium term.”

Mr White said the FBAA had worked closely with both the Government and Opposition in the lead-up to the election and had positive and professional support from both.

“On Sunday I communicated with both Labor and the Coalition, conveying thanks and best wishes from all brokers.

“We will continue to be highly engaged with politicians from across the country because our industry is a crucial one as we move into a new era.

“Brokers welcome the first home loan deposit scheme and other policies aimed at giving the property sector a boost. We will certainly do our part to boost competition and be ready to assist when the policy comes into play in January next year.”

13th of May 2019

FBAA cautiously welcomes first home buyer loan guarantee

The Finance Brokers Association of Australia says the Government’s proposed loan guarantee for home buyers, which will allow them to enter the market with only a five per cent deposit, is a very good initiative.

However managing director Peter White said the scheme’s success will be dependant on the banks which have over tightened credit policies following the royal commission.

“This will be great for first home buyers, although it’s worth noting that only about one tenth of the market will gain access to it,” he said.

While saving borrowers thousands of dollars in lenders mortgage insurance is a good outcome, Mr White cautioned that greater detail is needed to truly assess the benefits.

“There is a very good fundamental reason to have a deposit. If you can save for a deposit you can meet your monthly repayments, and this is what the banks look at.”

He also pointed out that with a falling property market, negative equity is a risk.

“We need to know the lenders’ credit policies around this, and they will have to step up to the mark and support it.”However he said overall, “if it can help stimulate people into buying their own home then that’s great.”

7th of May 2019

FBAA notes interest rate inaction despite solid case for cut

The Finance Brokers Association of Australia (FBAA) says many would-be home buyers will be disappointed by the decision of the Reserve Bank of Australia (RBA) to keep interest rates on hold.

FBAA managing director Peter White said the RBA board referenced employment figures strongly in their statement on monetary policy but also noted the impact of the changing dynamic on the housing market.

“The RBA has admitted that the demand for credit by investors has slowed noticeably as has growth in credit for owner-occupiers.

“Housing does play a major role in the health of the economy and while I understand inflationary pressure is subdued in part because of lower housing costs, we need a healthy and resilient housing market and we need accessible and affordable credit to achieve that.”

Mr White agreed with the RBA that borrowers of high credit quality can benefit from the current low mortgage rates, however that might not help first-home buyers or would be investors with limited credit history.

“As an industry, brokers are a saviour for many borrowers and I think the key role of brokers has been acknowledged by both sides of politics in the current election climate.

“I would have liked to have seen a rate cut but I firmly believe a reduction is still on the agenda in the coming months. What is also needed is certainty for brokers to ensure that we can continue to provide competition to the big four banks.

“We would like a commitment from both sides of politics to ensure the survival of the mortgage broking industry so that all Australians can continue to benefit from the services of a finance broker. We need the right policies to achieve that, not more uncertainty and deferred decisions.”

Australian Broker TV

Letter from Scott Morrison

In a letter addressed to Mortgage Brokers, Prime Minister Scott Morrison says,

“Mortgage brokers are critically important for competition and delivering better consumer outcomes in the mortgage market.”

17th of April 2019

FBAA leader elected as chair of global broker movement

The International Mortgage Brokers Federation (IMBF) has elected Peter White, the managing director of the Finance Brokers Association of Australia (FBAA), as its inaugural chair of their board of governors.

Mr White continues in his role as the association’s managing director and has been part of the FBAA for 16 years holding positions including national vice president, national president, chairman of the board of directors and chief executive officer.

“I am honoured to be elected to this position with the IMBF which uniquely leads the broking industry in global co-operation and collaboration. At no time in our industry’s history has this been done.”

Mr White played a significant part in the birth of the federation which was launched in Canada late last year. A foundation meeting last month established the board of governors and elected office holders.

“The purpose of the IMBF is to lead industry associations around the world in collaboration so they can openly discuss their own journeys with regulation and how they may impact regulation in our own countries.

“The IMBF has already proven its worth in the FBAA response to the banking royal commission. The commission was told by a major bank that the Netherlands broker model should be implemented here.

“Our colleagues in the Netherlands quickly explained the failures of that model and our resulting submission saw both sides of politics, and the commission itself, reject the idea.”

“As well as broking topics the IMBF also discusses matters such as property markets, economies, regulations, global codes of conduct, rules of ethics, data research and best practice so that our members are informed like never before,” Mr White said.

The IMBF also established an international referral network allowing brokers to refer clients moving overseas (or those coming to Australia from overseas) to be looked after by leading professional brokers in the country they are moving to, in consultation with the client’s current local broker.

The board of governors include chief executive officers, managing directors and national presidents representing finance and mortgage broker industry associations from Australia, Canada, the UK and the USA. New Zealand, the Netherlands, and other countries from Europe and Asia are expected to join soon.

16th of April 2019

FBAA welcomes interest rate cuts by big banks and calls on others to follow

The peak body representing Australia’s finance brokers has applauded the Commonwealth Bank of Australia (CBA) and Westpac for giving in to market pressures and reducing fixed interest rates for new borrowers.

Managing director of the Finance Brokers Association of Australia (FBAA) Peter White said the downward moves are not surprising given increasing competition from lenders who were more competitive across the loan products.

“Late last month I called on banks to immediately cut interest rates as evidence increased that the next move by the Reserve Bank would be down. In March there was a sharp decline in short term bank funding rates and the smaller banks were already revising down.”

The moves by CBA and Westpac puts them ahead of the other majors for owner-occupiers and investors and improves their rating against some smaller lenders. Recent figures suggest 40 lenders have dropped rates since the start of 2019.

“The decisions are interesting because they put pressure on the other major banks to at least match them or risk losing more market share. That’s exactly why Westpac moved yesterday after the CBA.”

Mr White said there are many mixed signals in the finance sector at the moment but there is growing speculation that there may be at least one, or possibly two, interest rate reductions by the Reserve Bank this year.

“Consumers will be keeping a close eye on the big banks when the official rates do go down. I expect the banks won’t pass-on the rate cuts in full and that will lead to more confusion for borrowers trying to get the best deal.”

Close to 60 per cent of borrowers currently source their home-loans through brokers rather than going direct to lenders.

“There are very good reasons for that. The royal commission blasted the banks for their culture of greed and lack of transparency. Brokers have a large number of loan providers to choose from and they find the right deal to suit the individual circumstances of each consumer.”

3rd of April 2019

FBAA tips budget boost to result in bank crackdown

The Finance Brokers Association of Australia (FBAA) has welcomed the budget funding commitment enabling ASIC and APRA to respond appropriately to the recommendations of the royal commission.

FBAA managing director Peter White said it’s clear that a significant portion of the $404 million promised for ASIC over four years is for enforcement post the royal commission recommendations.

“Indications are little or none of this additional enforcement funding will be spent on actions against brokers, rather additional action to reign in the banks.”

Mr White cites an ASIC announcement late last year as evidence banks will be the focus. “The FBAA in December revealed that ASIC had reduced the cost to act as a credit representative for brokers from $104 to just $16.48 annually due to the decreased cost of enforcement. It is now indicatively being lowered again by ASIC going forward to $14.33.

“The total cost of legal enforcements against mortgage brokers has reduced to a third of the original cost in a little over 12 months, and now further again and that’s because brokers are doing the right thing by clients.”

However Mr White has strong reservations about the new task force to review brokers remuneration in three years.

“We will work with the new task force but only as it acts as a system of checks and balances and to ensure the model remains commercially sound and in the best interest of borrowers. After years of uncertainty we will not support a review which again puts in doubt the continuity of broker commissions and the ability of a broker to earn a reasonable income.”

He said the FBAA welcomes the move to provide the Australian Financial Complaints Authority with additional funding to assist those with historical eligible financial complaints. The number of financial complaints against brokers is minimal – approximately 0.5 per cent of the total – while complaints against banks have skyrocketed.

Overall, Mr White said he would have liked to see the budget provide more assistance for struggling homebuyers, particularly given the declining home values in some areas combined with persistent global uncertainty.

“The government, and all major political parties, must examine what they can do to stimulate the housing market, not suppress it and that includes any change to negative gearing and capital gains tax,” Mr White said.

1st of April 2019

Big banks urged to cut rates now

The peak body representing Australia’s finance brokers has urged the major banks to stop talking up the credit squeeze and start helping borrowers by cutting interest rates, thereby following the lead of smaller banks.

Managing director of the Finance Brokers Association of Australia Peter White said ASIC chairman James Shipton was right to criticise banks at an industry summit on Wednesday.

“Mr Shipton has called out banks for blaming a credit squeeze on tough new interpretations of responsible lending regulations when the laws have been in place for more than a decade.”

The ASIC chair reportedly told banks to ‘lean in’ to their obligations saying he was unimpressed with industry reluctance to comply with long-standing laws.

“The big four banks cited increased costs when hiking rates months ago and just this week some bank leaders have tried to blame the royal commission for the credit squeeze and delays in assessing loan applications, claims APRA Chair Graeme Samuel called ‘a load of utter nonsense.’

Mr White said banks are still blaming everyone else for their shortfalls, despite ASIC forecasting increased court action against them partly because of alleged breaches of the Corporations Act, which demand services are provided “efficiently, honestly and fairly”.

He also pointed to a sharp decline in short term bank funding rates as the latest evidence supporting rate cuts.

“Smaller banks are already cutting rates and some economists are predicting two official rate cuts this year with the Reserve Bank moving to a neutral bias amid concerns about the slowing global economy and the declining housing market.

“The first official rate cuts of 2019 may be here soon, but going by history, I suspect the banks will protect their massive profit margins by refusing to pass on any cuts in full.”

Further evidence of the dominance of the big four banks came recently when many of the smaller banks, including Bank of Queensland, Bendigo Bank and Adelaide Bank warned of weaker earnings and challenging conditions.

“In the ongoing debate about the reforms impacting mortgage brokers there has never been a more crucial time for competition in the marketplace.”

Mortgage broker peak body responds to Labor statement on broker reforms

The peak body representing mortgage brokers has welcomed Labor’s statement on reforms for brokers saying it will ease some of the mental health duress being felt throughout the nation. Finance Brokers Association of Australia managing director Peter White said the announcement provides some much-needed clarity for brokers moving forward, while also ensuring transparency on commissions. “We will continue dialogue with both sides of politics to further shape the end model so that the borrower wins and competition in the market is maintained. “Labor’s decision to scrap trail commissions and standardise commissions at a fixed percentage of loan size is positive but there needs to be more work done around clawbacks. “There needs to be some protective mechanism in place, and that will be one of the key issues for us moving forward.” Mr White said the government and Labor were aligned in many of their responses to the royal commission but not all. “Both sides of politics should be congratulated for their willingness to listen to the industry but those talks are not over yet,” Mr White...

Bendigo Bank urged to look in the mirror before throwing stones at brokers

The managing director of the Finance Brokers Association of Australia has provided some timely advice for the head of the Bendigo Bank – ‘focus on your own performance instead of attacking brokers’. Peter White said Bendigo Bank is wrong to support the Hayne recommendation scrapping commissions to brokers. “It’s timely that Bendigo Bank attacks brokers on the same day they announce weaker than expected first-half profit results. “While the market was watching Bendigo Bank shares plunge 6.8 per cent in value, their managing director was supporting a fee-for-service model for the broking sector – a ridiculous proposition that would return market dominance to the big banks. “Marnie Baker was quoted saying current arrangements enhance the risk of poor or conflicted advice, but she doesn’t seem to understand that brokers do not give advice, they provide credit assistance as described in legislation.” Ms Baker also suggested a lack of competition was a contributor to the system’s woes. “What do you think will happen if brokers are forced out?” asked Mr White. “There will be less competition and the big four banks – not Bendigo – will benefit.” “Perhaps Bendigo Bank’s shareholders would prefer the leadership team focus on boosting their own results rather than firing shots at brokers who focus on the needs of borrowers, rather than the profit margins of...

FBAA tells MPs and media that brokers are the key to better consumer outcomes

The Finance Brokers Association of Australia (FBAA) has warned both the Federal Government and Opposition that they would be betraying borrowers if the remuneration structure for brokers was changed. FBAA managing director Peter White, who has been prominently featured across national media yesterday and today, told Sky News that if implemented, the recommendations from Commissioner Kenneth Hayne would send Australia back to the dark ages where a few banks held all the power. Mr White also pointed to comments from respected finance commentator Peter Switzer who called the royal commission’s plans for mortgage brokers “crazy”. “The broking sector has undergone reviews from ASIC and the Productivity Commission and each time the recommendation has been not to change the structure,” Mr White explained. The FBAA head has waged a non-stop media campaign from Parliament House in Canberra where he has been since yesterday’s lockup, with a simple message – “Mortgage brokers provide competition and choice, and give borrowers lending options that most people are just not aware of, and these options enable borrowers to get better outcomes.” He also said commentary that criticised broker commissions was misinformed and hypocritical. “Talk about conflicted commissions misses the point, as every business person’s remuneration is conflicted because everyone wants to do business. “The issue is transparency, and brokers already disclose commission under the National Consumer Credit Act, which was established after lobbying from our industry. “Unlike the banks which have done business for years under a shroud of secrecy, the broking industry has pushed for openness and transparency, better business practices, and tough penalties for any broker that does the wrong thing.” He...

Mortgage brokers key to better consumer outcomes

The national peak body representing finance and mortgage brokers has warned both the Federal Government and Opposition that they would be betraying borrowers if they change the remuneration structure for brokers. Finance Brokers Association of Australia (FBAA) managing director Peter White said if implemented, the recommendations from Commissioner Kenneth Hayne would send Australia back to the dark ages where a few banks held all the power. Mr White pointed to comments from respected finance commentator Peter Switzer today who called the royal commission’s plans for mortgage brokers “crazy”. “The broking sector has undergone reviews from ASIC and the Productivity Commission and each time the recommendation has been not to change the structure,” Mr White explained. “Mortgage brokers provide competition and choice, and give borrowers lending options that most people are just not aware of, and these options enable borrowers to get better outcomes.” He also said commentary that criticised broker commissions was misinformed and hypocritical. “Talk about conflicted commissions misses the point, as every business person’s remuneration is conflicted because everyone wants to do business. “The issue is transparency, and brokers already disclose commission under the National Consumer Credit Act, which was established after lobbying from our industry. “Unlike the banks which have done business for years under a shroud of secrecy, the broking industry has pushed for openness and transparency, better business practices, and tough penalties for any broker that does the wrong thing.” He said talk that the current system incentivises brokers to write higher loans is “just rubbish”. “The average broker-written loan is $30,000 higher than the average bank-written loan for a variety of reasons which...

Royal commission recommendations may push up interest rates and reduce housing affordability

The national peak body representing finance and mortgage brokers says the royal commission has failed to understand the role of mortgage brokers and the competitiveness they bring to the market following its recommendations to eliminate trail commissions for brokers, which the Government has implemented from July next year. Managing director of the Finance Brokers Association of Australia (FBAA), Peter White said today should be the day of reckoning for big banks who have spent far too many years putting profits above people, yet the result of eliminating trail commissions could realistically mean interest rate hikes. “This could force up-front commissions to rise in order to compensate for reduced revenues to brokerages, which in turn will lift interest rates and make housing affordability more difficult,” he explained. He also slammed the recommendation to eliminate up-front commissions, and congratulated the Government for not reacting to this. “Commissioner Hayne wants to hand even more power to the big banks and eliminate competition, which is a ridiculous scenario and shows just how out of touch he is when it comes to brokers. “If a user-pays model was implemented, we know that most borrowers wouldn’t pay, and banks would make more money and standards would drop further. “It’s very disappointing that the royal commission wants to destroy some 20,000 small businesses for the monetary gain of the big banks, and we trust the Government will see clearly on this and continue to work extensively with our industry to improve consumer outcomes.” Mr White said borrowers trust and support brokers. “There is a reason why over 59 per cent of loans are written through brokers....

Mortgage broker boss sleeps easy ahead of banking royal commission report

As federal treasurer Josh Frydenberg prepares to release Kenneth Hayne’s report from the banking royal commission today, the man representing the nation’s finance and mortgage brokers has revealed he is sleeping comfortably. Peter White, managing director of the Finance Brokers Association of Australia (FBAA), said despite some isolated criticism of the broking sector and reporting that he labelled “misinformed and sensational”, he is not expecting a massive shake up of the industry. “It is an indisputable fact that there are only a minuscule amount of finance brokers who have done the wrong thing, and they’ve been caught and thrown out of the industry by the regulators, which shows the system is working,” he explained. Mr White, who has spent almost 40 years in the finance and lending industry including roles as CEO of well known lenders, described the royal commission as “the biggest baseball bat to hit the industry that he’s ever seen”, but said finance brokers – who write over 54 per cent of the nation’s mortgages – had already been through a reform process. “This royal commission is about the greed of the big banks and insurance companies, and so it should be because their behaviour has been appalling. “The broking sector was well ahead of the game, as we’ve already been through reviews from ASIC and the Productivity Commission. Before the royal commission was established we changed a number of practices in the interests of openness and transparency.” He said customers were voting with their feet and trusted brokers far more than the banks. “Customers get a better outcome by using a mortgage broker. They get...

FBAA rejects ill-informed CHOICE campaign against brokers

The FBAA has labelled an anti-broker campaign by CHOICE as ill-informed and diametrically opposed to their stated motivation of getting consumers the best deal on mortgages. FBAA managing director Peter White said he was amazed that any reputable organisation would call for consumers to pay up-front fees for broking services when that would simply drive more people to banks. He pointed out the interim findings of the royal commission said banks are driven by ‘greed – the pursuit of short- term profit at the expense of basic standards of honesty.’ “Brokers are transparent about their commissions and they are driven to achieve the best product for the consumer,” he said. “The commissions paid to brokers from lender to lender have a negligible difference so it’s ridiculous to suggest the existing commission structure works against consumers.” Only weeks ago, the ACCC also concluded that banks use their lack of transparency to stifle competition and make extra profit from customers. “Informed commentators understand the role that mortgage brokers play in the financial services industry in this country and they know that consumers get the best deal from a broker who understands their situation and responds accordingly,” Mr White...

New credit card criteria set to impact home loans and retail spending

As the busiest time of the year looms for retail sales FBAA managing director Peter White has warned that changes coming into effect on January 1 will impact credit card holders, and eventually anyone applying for a mortgage or personal loan. “The changes could make it even harder to obtain credit, potentially pushing house prices down further and hitting consumer spending and the broader economy. “I have been in Canberra this month arguing against these changes in their current form. I think there is a general lack of awareness about the serious impact this will have on the deemed capacity of a borrower to repay their debts,” Mr White said. ASIC has introduced new assessment criteria to be used by banks and credit providers when assessing the serviceability of new credit card contracts or credit limit increases for consumers. Whenever a loan provider is assessing a mortgage application, or any application for a loan, they must take into account the ability of the borrower to pay the entire credit limit of every card the applicant has, over a period of three years. If a card holder has three cards each with a $10,000 limit, the serviceability has to include the borrower’s ability to pay back the full $30,000 in a three-year period, as well as being able to service other loans. This applies even if the applicant has a zero balance. Under the changes credit providers will also have to assume an interest rate that is two per cent above the highest rate in the market which is currently 22 per cent. Previously the card holder simply had to...

Borrowers shouldn’t have to make threats to get a better deal

The Finance Brokers Association of Australia (FBAA) has registered a ‘no surprise’ response to an ACCC finding that banks are using their oligopolistic power and pricing structures to squeeze even more profit out of borrowers. The ACCC’s Residential Mortgage Price Inquiry report has found that opaque, discretionary pricing by banks makes it difficult and time consuming for borrowers to shop around and stifles price competition. FBAA managing director Peter White said the report highlighted the fact it is against their interests for banks to make pricing transparent, and that’s where brokers provide the solution. “Brokers are the key to the need for greater transparency and we are able to help borrowers negotiate with their bankers.” Further evidence of the key role of finance brokers also came in the ACCC report which concluded that high search costs and the effort required by borrowers reduces their willingness to shop around. “Every month that passes when a borrower has a bad deal means more profit for the bank and less money for the borrower. Mr White also pointed out that mortgages are not only about interest rates. “Often borrowers get trapped in a loan that doesn’t suit their needs, but brokers have access to hundreds of different loan products and take into account individual circumstances.” The ACCC monitored the prices charged by the five banks affected by the government’s Major Bank Levy between May 9 2017 and June 30 2018. The big four banks gained an estimated $1.1 billion in additional revenue because they took the opportunity to increase headline variable interest rates for interest-only mortgages. “This predatory move by banks cost...
10th July 2019

Finance broker association goes high-tech with global first App

A new era in technology has begun with the launch of a world first web application which promises to revolutionise the way finance brokers manage industry needs including applying for membership and managing renewals, credit and bankruptcy checks, insurance and ombudsmen requirements plus education and training.

The App, which is now live and available globally, removes a substantial administrative task for both staff and member associations with a strategy to offer the technology to member-based organisations around the world over the next few months.

Finance Brokers Association of Australia (FBAA) managing director Peter White said the App provides instant membership approval for both new memberships and renewals, a capability that revolutionises the process.

“As long as all criteria has been met the App takes care of the rest allowing all membership requirements to be driven while the prospective member is keying in the data.

“It also means membership certificates are dispatched in real-time via email so that once the data is in, the membership certificate is in their inbox.”

Mr White said at the heart of the new App was artificial intelligence and optical character recognition technology which increases the capabilities and functionalities as it grows and learns from inputs.

“This impacts the industry as a whole because massive data analytics capabilities actually help drive the future of the business through greater understanding of its membership composition, member needs and specialisation learnings.”

The new technology also helps users to manage and monitor industry requirements and user needs all year round including tracking protection and indemnity insurance issues and compulsory professional development needs.

“The App triggers key dates in the system so when it comes time to renew all you do is click ‘yes’ and the system either runs automatic payments or generates payment at the time of acceptance without headaches or clumsy requirements and more forms.”

The benefits extend past members to aggregators who can use the technology for the on boarding process as it enables them to complete the broker’s association membership component on the spot, enabling the broker and aggregator to complete the needs of the lender and their own needs without the usual one to two week delay or longer in some cases.

IT workers are already developing version two of the new application which will further streamline the system and generate profitability and efficiencies to stakeholders.

10th July 2019

Finance broker association goes high-tech with global first App

A new era in technology has begun with the launch of a world first web application which promises to revolutionise the way finance brokers manage industry needs including applying for membership and managing renewals, credit and bankruptcy checks, insurance and ombudsmen requirements plus education and training.

The App, which is now live and available globally, removes a substantial administrative task for both staff and member associations with a strategy to offer the technology to member-based organisations around the world over the next few months.

Finance Brokers Association of Australia (FBAA) managing director Peter White said the App provides instant membership approval for both new memberships and renewals, a capability that revolutionises the process.

“As long as all criteria has been met the App takes care of the rest allowing all membership requirements to be driven while the prospective member is keying in the data.

“It also means membership certificates are dispatched in real-time via email so that once the data is in, the membership certificate is in their inbox.”

Mr White said at the heart of the new App was artificial intelligence and optical character recognition technology which increases the capabilities and functionalities as it grows and learns from inputs.

“This impacts the industry as a whole because massive data analytics capabilities actually help drive the future of the business through greater understanding of its membership composition, member needs and specialisation learnings.”

The new technology also helps users to manage and monitor industry requirements and user needs all year round including tracking protection and indemnity insurance issues and compulsory professional development needs.

“The App triggers key dates in the system so when it comes time to renew all you do is click ‘yes’ and the system either runs automatic payments or generates payment at the time of acceptance without headaches or clumsy requirements and more forms.”

The benefits extend past members to aggregators who can use the technology for the on boarding process as it enables them to complete the broker’s association membership component on the spot, enabling the broker and aggregator to complete the needs of the lender and their own needs without the usual one to two week delay or longer in some cases.

IT workers are already developing version two of the new application which will further streamline the system and generate profitability and efficiencies to stakeholders.

10th July 2019

Finance broker association goes high-tech with global first App

A new era in technology has begun with the launch of a world first web application which promises to revolutionise the way finance brokers manage industry needs including applying for membership and managing renewals, credit and bankruptcy checks, insurance and ombudsmen requirements plus education and training.

The App, which is now live and available globally, removes a substantial administrative task for both staff and member associations with a strategy to offer the technology to member-based organisations around the world over the next few months.

Finance Brokers Association of Australia (FBAA) managing director Peter White said the App provides instant membership approval for both new memberships and renewals, a capability that revolutionises the process.

“As long as all criteria has been met the App takes care of the rest allowing all membership requirements to be driven while the prospective member is keying in the data.

“It also means membership certificates are dispatched in real-time via email so that once the data is in, the membership certificate is in their inbox.”

Mr White said at the heart of the new App was artificial intelligence and optical character recognition technology which increases the capabilities and functionalities as it grows and learns from inputs.

“This impacts the industry as a whole because massive data analytics capabilities actually help drive the future of the business through greater understanding of its membership composition, member needs and specialisation learnings.”

The new technology also helps users to manage and monitor industry requirements and user needs all year round including tracking protection and indemnity insurance issues and compulsory professional development needs.

“The App triggers key dates in the system so when it comes time to renew all you do is click ‘yes’ and the system either runs automatic payments or generates payment at the time of acceptance without headaches or clumsy requirements and more forms.”

The benefits extend past members to aggregators who can use the technology for the on boarding process as it enables them to complete the broker’s association membership component on the spot, enabling the broker and aggregator to complete the needs of the lender and their own needs without the usual one to two week delay or longer in some cases.

IT workers are already developing version two of the new application which will further streamline the system and generate profitability and efficiencies to stakeholders.

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