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NAB’s executive general manager of broker partnerships and chair of the Combined Industry Forum, Anthony Waldron, outlines the value of the broker channel and the impact of the incoming best interests duty.
Mortgage brokers are incredibly important to the Australian economy. They play a vital role in enhancing competition and providing access to credit, which is why more than one in two Australians use a broker to find a home loan that’s right for them.
We know many of these consumers, particularly first home buyers, would find it challenging to navigate the market without a broker by their side and, certainly, smaller lenders would not be able to compete if it wasn’t for brokers recommending them to customers.
At NAB, 44 per cent of our customers use brokers and continue to access their services throughout the life of their loan. This figure has continued to increase year-on-year.
But like all industries, brokers must adapt and continually improve standards to not only meet but exceed customer expectations. Customers need a strong, viable broker industry to protect competition and access to credit.
Brokers heard loud and clear that the industry requires change, and at NAB, we are glad that we started this journey a couple of years ago.
In 2017, together with industry bodies, lenders, brokers and aggregators, we were a founding member of the Combined Industry Forum. And over the past two years, we’ve been working hard to improve broking industry standards and create a stronger culture that’s focused on customers.
In this time, the broking industry has undergone significant overhauls, including changing the way commissions are paid, moving away from bonus payments and soft dollar benefits, establishing clearer disclosure of ownership structures and a new public reporting regime. The final step will be a governance and oversight framework due to be implemented by end of 2020, which ensures higher standards of professionalism in the industry.
We also know that education and professional development for brokers is vital to support change and help support good customer outcomes, and we are continuing to invest in this area.
While there’s still more we need to do, we’re confident we are making a positive impact and are determined to continue to help lead this change.
Recently, we were pleased to see the Treasurer’s draft legislation on mortgage broker best interests duty and remuneration reforms, which will build upon the work already underway.
While industry has already implemented reforms around remuneration, enshrining them in law will mean the whole industry is covered by these changes, assisting in managing any potential conflicts. We look forward to working with Treasury and regulators on how all these reforms should be implemented to ensure we continue to get great customer outcomes.
By continuing to make these changes, we believe the broking industry will become even more important to our economy and continue to promote a competitive mortgage market ultimately benefiting millions of Australians looking to secure their dream home.
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