Productivity Commission gets it wrong on brokers

The executive director of Australia’s peak body representing finance brokers has slammed the section of yesterday’s draft report into competition in the Australian financial system – released by the Productivity Commission (PC) – that refers to brokers.

Peter White of the Finance Brokers Association of Australia says there has clearly been a lack of research by the PC because what they are calling for either already exists under legislation or are a part of reforms already being worked on by the industry in association with ASIC and Treasury.

“The authors of this report should be embarrassed, because it was full of incorrect figures and misinformation, even getting the number of brokers wrong.

“Honestly, how can an organisation like the Productivity Commission be so clueless about a major industry they are supposed to be researching?”

Mr White said the preparation of the report was done with no consultation with the industry.

“One of many examples of the PC’s lack of understanding is the call for disclosure of broker commissions when this is already in legislation and has been for years.

“They clearly have no idea about the current legislation and haven’t bothered to talk to ASIC about the current comprehensive reform process being undertaken with industry right now.”

The broking head, who has been involved in the industry for 39 years said that if it wasn’t for brokers in Australia, there would not be the pricing competitiveness and product enhancement that exists today.

Examples are redraws, offset accounts, lines of credit against a residential house — all brought in by the competition and the development of products in the broking sector.

“Finance brokers represent over half of all mortgages written in Australia and they do so within a professional and highly regulated environment.

“There would not be a week where I’m not in discussions with regulators or government on behalf of our industry, and together we have increased accountability and transparency, while lifting standards.

“If a finance broker provided a customer with the level of misinformation that is in this report from the Productivity Commission, they’d lose their licence.”

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