This week, regulation dominated the news, with new expectations for verifying expenses, clawbacks in the spotlight and a law that could impact broker contracts.
Clawbacks have been a big issue of discussion of late, and no one has been more vocal than FBAA
chief Peter White
. This week, White said he met with Treasury
to discuss his concerns.
“The main point I bought up was in relation to unfair clawbacks, and I spoke to her from her position as small business minister, and how they are unreasonable and unfair and it has an impact on the broker community. For smaller groups it could actually wind up putting them into hardship provisions. It is completely unreasonable,” he said.
But a new law regarding unfair contracts
could lend some aid. A bill passed by the Senate is set to provide new protections to small business in the face of unfair contract terms. Time will tell whether the legislation is used as a precendent to fight clawback clauses, but Gadens Lawyers' Elise Ivory said the law will give brokers additional legal recourse if they feel they've been treated unfairly.
Finally, brokers were in for a shock this week when it was revealed ASIC told NCCP compliance expert Greg Ashe
that it expected licensees to apply the same scrutiny to verifying living expenses as they did to verifying clients' income.
“It was mutual astonishment really. I was completely astonished that that is what their expectation was and they were completely astonished that the industry is not already doing this," he said.