Making news this week was more discussion around commission structures as ASIC shed light on its forthcoming review, declining home loan demand and a major milestone for a leading peer-to-peer lender.
As ASIC prepares its review into remuneration in mortgage broking, ASIC senior executive leader - deposit takers, credit & insurers, Michael Saadat told Australian Broker
that commissions are a form of a conflicted remuneration
. However, this doesn’t mean the regulator will go into the review with a view against commissions.
“ASIC has not looked at commissions specifically so we do not have any data to indicate whether commissions are causing brokers to act in a way which is not beneficial for consumers.”
Meanwhile, in response to a poll asking whether commissions should be standardised, Sydney-based broker Alex Stephen said a ‘one-size-fits-all’ approach
would not work in practice.
“I think it may lead to some degree of collusion [between banks]. When banks are given a reason to talk to each other then they will collude and try and push the pricing down as far as brokers are concerned,” Stephen told Australian Broker
The most recent data from the Australian Bureau of Statistics (ABS) revealed that the demand for home loans dropped
0.5% in October, after increasing 2% in September. It is the first time the number of housing finance commitments dropped since May and another telling sign that the housing market may have passed its peak.
But while home loan demand dropped, major P2P lender SocietyOne announced
it surpassed $60 million in total loans. SocietyOne specialises in providing a competitive alternative for personal loans.
However, the chief executive Matt Symons told Australian Broker
that it is the type of borrower driving the growth which really demonstrates the value of the P2P proposition.