It is time banks play fair: FBAA

by Julia Corderoy04 Nov 2015
As the major banks report increased profits over the latest reporting season, the FBAA is taking a stand against “unreasonable” commission clawbacks.

Peter White, the chief executive of the FBAA, says clawing back commissions, or income, from brokers is fundamentally wrong.

“I have always believed that upfront clawbacks have been wrong. You do your job and complete your job and circumstances outside your control means that things change and you lose your income – that is just not right. It is fundamentally not fair,” he told Australian Broker.

“Unless a broker did something wrong – they were in breach of their contract or they were churning – then clawbacks are appropriate. However, if a broker has done nothing and the bank has refinanced it or another bank has come out with a better offer all of a sudden and the client has walked and a broker can’t stop it – why should they be penalised for that?”

White is now urging brokers to speak out and take a stance against the major banks for unfair clawbacks.

“What brokers can do is write to the FBAA, who have been very vocal about clawbacks. Whether they are members or not, it doesn’t matter, they can write to the FBAA and we will champion the cause,” White told Australian Broker.

“Brokers can also make public comment as we do too. If they want they can actually go direct to the lenders, however, I believe with this sort of thing there is greater strength in numbers, so there needs to be more of a collective situation. 

“I think it would be better if brokers sent me an email so I can compile a confidential petition and can start to lobby the lenders and tell them it is time to play fair. Banks don’t penalise the bank loan officers if a loan gets turned over in 12 months’ time. The bank officer doesn’t lose their salary. It should be no different with the broker.

“I understand there are certain challenges to it, but I do believe it is time that banks play fair with the people who are giving them the majority of their home loans and not to be penalising them for things that are out of their control.”
 

COMMENTS

  • by plucka007 4/11/2015 8:51:30 AM

    Exactly that... Had a deal 5 years ago with Westpac... Client decided to top up and restructure to purchase another home... Got clawback for a deal 5 years ago and 3 month later the client sold their first home and paid out their loan and got a full clawback... So essentially I worked 5 years for the client for nothing...

    And what's more funny is that 5 years ago the commissions were a little lower but if you get clawback today they calculate on today's commissions which is even more than what they paid upfront for the loan. Stupid Westpac.

  • by GC 4/11/2015 8:52:25 AM

    Why should brokers write to the FBAA. It's plainly obvious we all disagree with the absurd policy. We now control nearly 60% of where the loans are placed. I would have thought that would carry some weight.

    FBAA & MFAA should just get on with it and start working on having claw backs removed.

  • by Joffa 4/11/2015 9:02:10 AM

    This, to me, is by far the worst aspect of broking.
    There is simply no other industry like it, whereby your income is still at risk two years after you performed work in good faith. This is a long time coming, and I hope we get somewhere.