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The leaders of several of the major aggregators have applauded the shadow finance minister’s comments regarding Labor’s position on broker remuneration.
Last week, the shadow assistant treasurer and shadow minister for financial services and superannuation, Stephen Jones MP, confirmed to The Adviser that the Australian Labor Party (ALP) had no intentions of changing the current broker remuneration structure.
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The comments from the Labor MP are pertinent given the upcoming federal election (expected to be held in May) as they clarify the Labor Party’s positioning on broker remuneration.
The leaders of some of the major aggregation groups have now welcomed the confirmation of the party’s stance.
AFG chief executive David Bailey said it was “very pleasing to see the Labor party voice their recognition of the value brokers provide, not only to their customers but also to the successful operation of the finance sector”.
“With this decision now made we are hopeful that the ongoing debate around broker remuneration is put to bed,” Mr Bailey said.
“Should the ALP be successful at the next federal election we are looking forward to them following through on that strong commitment to their constituents – the thousands of business operators in the community working as mortgage brokers and the customers they serve.”
Similarly, Glenn Lees, CEO of Connective, told The Adviser that Labor’s decision was “further recognition of the value that brokers provide to the Australian public”.
“As we have advocated for many years, changing broker remuneration – particularly as recommended by the Royal Commission – would only reduce competition and ultimately lead to borrowers having to pay more than they do today,” he said.
David Hyman, CEO of Lendi Group (the parent company of online brokerage Lendi and major brokerage and aggregator Aussie), told The Adviser that he believed that “brokers deserve to be fairly remunerated for the service they provide”.
He continued: “[A]t Lendi Group, we support regulation and policy that ensures the best outcomes for customers in the long term.
“Combined with the recently implemented Best Interests Duty, it is our strong belief that the existing arrangements achieve these objectives and any change would be an unnecessary complication for all stakeholders.”
Meanwhile, the executive chairman of the Loan Market Group, Sam White, told The Adviser that he believed the “unequivocal statement” was a “really strong statement with such a positive intention” and was testament to the work undertaken by the broker associations.
He said: “This bookends the four years of uncertainty brokers have been going through [since the royal commission]…
“While the [Morrison] government has said that they will do a review at the end of this year, we have both sides of politics now saying that brokers do a great job and that the remuneration structure works.
“We can’t underestimate the role of the associations in this. We’ve all done what we can – aggregators, lenders, brokers – but to have that consistent messaging coming out from the associations, that ability to work behind the scenes and to consistently represent our interests has been so critical.
“I think they’ve done a fantastic job to represent the amazing work that brokers do for customers and so I think it’s important that we all keep consistently advocating and presenting the best case for our industry to both Labor and Liberal parties.”
Susan Mitchell, CEO, Mortgage Choice and Smartline, welcomed Mr Jones’ commitment to “maintain the status quo”, adding: “There are already enough checks and balances in place for mortgage brokers to provide service that is in the best interests of their customers and without moving to a fee-for-service model. This is the same message the industry took to the 2019 federal election.
“It is important that any future review of broker remuneration be conducted in consultation with the industry.”
The heads of both the Finance Brokers Association of Australia (FBAA) and Mortgage & Finance Association of Australia (MFAA) have also welcomed the shadow minister’s comments, and can be read here.
[Related: Broker associations welcome ALP remuneration position]
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