What are your thoughts about recent commentary from consumer groups recommending that ASIC undertake a new review into broker remuneration?

It will only show the benefits of brokers

The amount of times I have seen non-broker customers being overcharged by lenders or advised of bad advice from frontline staff (either from lack of training or prejudice due to own beliefs) has seen customers revert to brokers for educational insight into their finances. This is confirmed by the increased take-up of brokers, now being over 70 per cent of market share.

Brokers have internal aggregator compliance (with best interests duty included in software by aggregator and random checks by aggregator compliance managers), as well as industry compliance updates, training on compliance, etc, so how much more regulation does this need when the banks do not comply with best interests duty at all?

The review of broker remuneration can only highlight the additional work that a broker does for their clients – good, old-fashioned customer service.

It’s based on unsubstantiated allegations

This raises significant concerns about the understanding these organisations have of the mortgage broking industry’s current regulatory landscape. The assertion that “the other source of potential harmful lending advice can come from the mortgage broking sector” is particularly troubling, especially given the lack of substantial evidence provided to support such claims.

It’s crucial to note that the mortgage broking industry has undergone significant regulatory changes in recent years, aimed precisely at ensuring consumer protection and high-quality service.

Given the robust regulatory framework already in place, one must question the necessity and prudence of allocating government resources to yet another review, especially when based on unsubstantiated allegations.

There’s no systemic harm linked to brokers

It’s important to recognise that the mortgage broking industry is delivering strong customer outcomes. This is evidenced by the low level of AFCA complaints and, according to consumer group, Financial Counselling Australia, minimal National Debt Helpline calls relating to brokers.

There’s no systemic harm linked to brokers; they’ve helped clients navigate some of the toughest economic conditions we have seen for some time. No doubt many of these borrowers are in a better position as a result of the relationship they have with their broker.

Regulations introduced post-royal commission, like the best interests duty, the conflict priority rule, prohibiting clawback costs to consumers, and banning volume-based benefits are working well. Growth in broker market share and the continued low level of complaints are key indicators of success that mortgage brokers are living and breathing their regulatory obligations.

They clearly don’t understand how the finance sector actually works

Finance and mortgage broker remuneration has undergone more reviews than are found on Google and, without exception, the current structure has been found to be the best and fairest to both brokers and consumers – remembering, of course, that mortgage brokers must, and do, abide by best interests duty.

This is accepted by both sides of politics and no one is questioning this except those groups who clearly don’t understand how the finance sector actually works.

It is also important to note that complaints against brokers are minuscule (albeit, any that are made are taken very seriously).

If it wasn’t for brokers, consumers wouldn’t have access to such a wide range of lenders, many people would not even secure a loan, and less competition would mean higher rates and costs for borrowers.