Sedgwick broker proposals “complicated”: ANZ

by Miklos Bolza12 Oct 2017
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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COMMENTS

  • by Chris 12/10/2017 10:42:39 AM

    Gotta feel for the poor major banks - forever dictating to everyone in the finance chain (even ASIC) via their 'totally arms length' sponsored Sedgwick report now winging over losing total control and dominance over some Broker payments. Not to say that they introduced volume payments at the time, to improve their own competitive edge but c'mon guys - give 'em a fair go. They seem to get upset when they don't get everything their way and always at the cost of others. We are told competition is good so I can't for the life of me, understand why they (ANZ this time) are now winging about what they started and want to dictate to other Lenders how to run their businesses in the name of themselves being able to retain their dominance in the market.

  • by Apple Pay 12/10/2017 8:19:54 PM

    Mr Elliott,

    It is not complicated. As a premium ANZ broker with a large aggregator, we do not receive any of the items under Sedgwicks point 16. In fact ANZ pays less commission than the other majors yet you have been very well supported. Your supported because you have aligned a combination of branch understanding the broker role, BDM's active, dual application with small business and competitive pricing and policy.

    That's your competitive advantage and the last thing one would want to do is cook that under the guise of Sedgwick. We all know Sedgwick was paid by the Banks (ABA) and it's not Gospel.

    It seems to have been commissioned as the ASIC review was not going the expected way and actually confirmed brokers were good for consumers.

    If your thinking Sedgwick point 16 is a problem, its not. Arrange commercial arrangements with the aggregators for the value they deliver, you know what they bring to the table and pay them the same way like your other important business partners.

    The last thing we want to see is the powers to be using Sedgwick as the reason!

    I think all brokers are dead set on watch here. Consumers do not have the bias for any brand like 5 years ago.

    Its an opportunity for ANZ. Apple pay.