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Mortgage Choice chief executive officer John Flavell has welcomed ASIC’s proposed inquiry into the mortgage broking industry.
It comes after the Assistant Treasurer Kelly O’Dwyer confirmed to The Adviser that the regulator will undertake an extensive and thorough review of the sector to help determine the effect of current remuneration structures on consumer outcomes.
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“We applaud ASIC’s decision to put the mortgage broking industry under the microscope, as they will then be able to see the tremendous job this industry does for consumers each and every day,” Mr Flavell said.
“When I first started in financial services, I worked in retail banking for one of the majors. Back then, the mortgage broking industry was non-existent and Australia boasted some of the highest home loan rates in the world.
“When mortgage brokers made their market debut, lenders were forced to basically drop their home loan rates overnight.”
Mr Flavell added that mortgage brokers have “helped force Australia’s lenders to better cater to the needs of home loan customers across the country”.
“In addition to lender competition, mortgage brokers have been responsible for driving home loan innovation and giving borrowers the right to choose the best product and lender for their needs,” he said.
Mr Flavell said he will support the proposed inquiry if it goes ahead as it will prove that the mortgage broking industry has nothing to hide.
“Of course, we don’t just support the need for transparency – we live it. At Mortgage Choice, we educate customers on how brokers get paid and ensure they understand that our brokers are paid the same rate of commission regardless of which home loan product a customer chooses from our panel of lenders,” he said.
“We strongly believe the third-party distribution channel has nothing to hide and an inquiry into the industry will only serve to prove this point.”
