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The head of the major brokerage has backed the remuneration review in three years’ time, stating that the industry “should expect scrutiny” as it plays an increasingly significant role in the financial sector.
Speaking on a webinar hosted by Loan Market, executive chairman Sam White said that the industry should come to terms with increased scrutiny from regulators and policymakers.
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Mr White backed the review of broker remuneration proposed by the incumbent Coalition government amid calls for a scrapping of the inquiry.
“I’ve heard some people say that we shouldn’t have a three-year review [but] I personally don’t agree,” he said.
“We are a big part of the financial services industry [and] because we’re a big part of it, we should expect scrutiny. We’re going to get bigger; there’s no question market share is going to rise so we can’t hide from that.
“We need to embrace it, put our best foot forward, and continue to do the things that we do well now.”
The Loan Market chair said the review would provide the industry with an opportunity to demonstrate its professionalism and highlight examples of good customer outcomes produced by brokers.
“Part of that [scrutiny] is getting better audit trails and data that we can show regulators. Part of it is also collecting customer testimonials and stories. It’s doing what we do but doing it in a more official way and a more collated way.”
Mr White added that scrutiny of the industry’s model is inevitable, regardless of whether a review is held in three years’ time.
“If there’s not a review, it’ll still come up again in some point in time. It’s not as if the issue is dead forever,” he added.
However, the Loan Market chairman welcomed the certainty that the Coalition’s electoral victory has provided to brokers, with current remuneration arrangements remaining in place.
“We can now say, this is what [the remuneration model] is going to be for the next three years and in three years’ time. Let’s make sure that we build on the [recording of data], communication, and on the values that we know we deliver every day to customers,” he said.
Mr White expects certainty over remuneration, along with APRA’s proposed changes to mortgage serviceability requirements, expected rate cuts from the Reserve Bank of Australia, the Coalition’s First Home Loan Deposit Scheme, and the rejection of the Labor opposition’s proposed changes to negative gearing and the capital gains tax, to provide brokers with unprecedented opportunities.
“Whatever black cat crossed our path, whatever ladder we walked under in December or January, that curse has been lifted,” he said.
“This week, it’s all come in a big wave. I’m sort of still pinching myself thinking, is this a dream?”
Mr White added: “We’ve got a series of opportunities that are unparalleled in broking for some time.
“We were going through a stage where we were facing Armageddon in February, to a stage now where we’ve got confidence.”
The aggregator head encouraged brokers to pursue the plans that they had previously placed on hold amid political and regulatory uncertainty.
“Now is the time to go hard. There is a set of opportunities over the next six months at least where we’re going to have a very good run because there’s just so much stimulus being added in now,” he said.
Mr White concluded: “We’ve won the war; let’s not lose the peace. Let’s make sure that we’re looking after our customers and talking to as many of them as we can and giving that service to more people.”
