ASIC’s broker shadow shop “imminent”

by Miklos Bolza24 Mar 2017
The Australian Securities & Investments Committee (ASIC) may be due to commence the shadow shopping mentioned in its proposed ‘suitability of advice’ review for brokers.

This additional targeted review was announced in ASIC’s Review of Mortgage Broker Remuneration released on 16 March.

In an interview with Australian Broker at a Connective PD day in Sydney yesterday (23 March), director Mark Haron said the regulator has already started further review activities and has put the industry on notice.

“Our understanding is that if they haven’t already commenced some of the shadow shopping, it’s imminent. They will be doing more shadow shopping to ensure that there are good customer outcomes.”

The regulator would conduct any additional reviews in a fair and balanced manner, he said.

Monique Hope-Pearson, outgoing group legal counsel at Connective, said the aggregator had a good working relationship with ASIC.

“We don’t feel that this review was a witch hunt in any way. It’s been trying to get a better understanding of how the industry operates. A lot of the report was talking about the industry, how it was constructed and who the players are.”

From an industry perspective, Connective always expected ASIC to continually review any of their suggestions, Haron said.

“In three years’ time, they’ll want to know whether or not there have been unintended consequences and whether anything needs to be updated or changed. Any industry that is regulated to the extent that we will have constant reviews.”

For its second market review, also announced in the Review of Mortgage Broker Remuneration, ASIC will ask for a repeat of any data gathered to compare trends and changes in the compiled information, he added.

“We will ensure that we remain thoroughly involved in any review moving forward, ” said Hope-Pearson. “We’ve got really sound data at Connective where we can ensure that good outcomes are reached.”

Related stories:

MFAA pushes for balanced, fair & equitable commission structure

ASIC remuneration review has limitations, say broker associations

“Let’s not blame the brokers”: Medcraft

COMMENTS

  • by Sally Field 24/03/2017 9:29:59 AM

    Well if they're going to mystery shop brokers, they better take an actual product.
    Hare dare they waste people's time otherwise when people have a business to run.
    Also these bureaucrats who are doing the mystery shopping will not get the full experience during the process through settlement and beyond. Any broker can recommend a product that's not unsuitable by ticking a boxes in a software platform.
    However do they know credit policy, do they update the client, do they make sure the clients accounts are set up, do they review their clients annually. These people better be doing this properly before they make any decisions around commissions.

    They need to go through the whole experience to see what value brokers really add. Not just a 1st appointment and they should shop both experienced and new brokers.

  • by Dave Robinson 24/03/2017 9:31:06 AM

    Firstly bye Monique we will miss you and secondly this comment by Mark "Any industry that is regulated to the extent that we will have constant reviews.” Um I am not sure about that (you wouldn't be sucking up to ASIC...would you?) I don't see the banks getting the reviews that we do, sure some interviews in Canberra every couple of months but no reviews let alone CONSTANT. Yes you could argue that FP's get a bit but only because of the scandals not sure we as an industry have had anywhere near the scandals they have yet banks as a whole don't have reviews just investigations when the whistle blowers let loose.

  • by try it 24/03/2017 2:16:21 PM

    Ha ha ha. I will charge them a fee for being a time waster if they shop me (after I give them my quote and credit guide of course). I will also report them to the police if they give false information.