While the Australia and New Zealand Banking Group (ANZ) will do what it can to commit to the Sedgwick proposals, the CEO of the major bank has said that Recommendation 16 on mortgage broker remuneration poses its own complications.
Recommendation 16 suggests banks cease specific types of broker remuneration such as volume-based incentives additional to upfront and trail, non-transparent soft dollar payments, and the practice of increasing incentives payable during sales campaigns.
ANZ CEO Shayne Elliott made these claims in front of the House of Representatives Standing Committee on Economics in its review of Australia's four major banks in Canberra yesterday (11 October).
While the bank was working together on this as an industry, it could not move forwards on this unilaterally, Elliot said.
He added that while industry had done a lot of work to improve the in-bank channels, it was only natural that this be extended to another important channel, brokers.
The Australian Bankers’ Association (ABA) and even large brokers are “aligned to this,” he said.
Deputy chair of the committee, Matt Thistlethwaite, questioned whether there was competition in the industry since ANZ could not move on its own as an individual bank.
Elliott responded saying that this was the opposite and that the bank would lose business if it acted on Sedgwick’s broker remuneration proposals on its own.
However, he said that industry was working together on this, acknowledging that any changes would affect thousands of brokers.
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