The MFAA and FBAA have both praised ASIC for extending the parameters of its review into remuneration in the mortgage broking sector.
Siobhan Hayden, the chief executive of the MFAA said the association worked closely with ASIC during the development of the scope, both directly and with engaging brokers for the two round tables in Sydney and Melbourne. She said the final scope “aligns closely” with the majority of the recommendations in the MFAA’s March 2016 submission.
Hayden has also said the association endorses ASIC’s confirmation the review will extend beyond mortgage brokers.
“We also endorse the inclusion of referral and introducer businesses as part of this review, as they are sometimes involved in remuneration outcomes which may be considered as unregulated and may involve receipt of a benefit without proper disclosure,” Hayden said.
“The exclusion of less significant products such as reverse mortgages and construction loans is also welcome.”
The FBAA – who also worked closely with the regulator in informing the review – has also welcomed its scope. However, the FBAA’s Peter White
says it is what was expected.
“ASIC is looking at outcomes, and ensuring that however a broker is remunerated it doesn’t impact the appropriate outcome and needs of the borrower,” he told Australian Broker
“So whoever is in that chain – lenders, mortgage managers, comparison sites etc. – that directly or potentially impacts commission earned by brokers and/or incentives and referral fees should be included.
“The review has always been about how brokers are remunerated, regardless of who they are paid through or by.”