One of the broker heads at National Australia Bank (NAB) has come out and expressed the bank’s “broad” support for the ASIC review recommendations, saying that the current commission model needs to be adjusted.
“We don’t believe that the current standard commission model has resulted in poor consumer outcomes, but we believe it is essential to manage not only actual conflicts but also the potential for perceived conflicts of interest,” said Anthony Waldron
, NAB executive general manager of broker partnerships.
ASIC had suggested that incentives not be structured to encourage larger loan sizes with larger offset balances, he said.
“We believe the industry needs to make adjustments to the standard commission model by paying up-front commissions based on the drawn down amount, not the total facility amount, and by paying up-front commission net of offset balances.”
On 30 June, NAB submitted its response to Treasury on the ASIC proposals which Waldron noted recognised the positive effects that brokers had on the market.
“In its comprehensive review, ASIC made many observations that acknowledged the value that brokers play ‘in promoting good consumer outcomes and strong competition in the home loan market’.”
NAB supported the six ASIC proposals “in broad terms,” Waldon said.
With regards to the regulator’s suggestion to move away from bonus payments, NAB had never paid volume bonuses on mortgages, he added.
“The time for such payments has passed.”
Soft dollar benefits should also be managed transparently through the use of gift and conflict of interest registers, he said.
“We note however that the ongoing education and professional development of brokers is essential and we need to continue to focus on this, ensuring it’s conducted in line with community expectations.”
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