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APRA lender crackdown could hit brokers

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Australian Broker | 27 May 2014, 08:24 AM Agree 0
The regulator is discouraging banks from paying high up-front commissions to brokers in a crackdown on mortgage risk
  • Head in the clouds | 27 May 2014, 09:00 AM Agree 0
    What a load of rubbish
  • Clarke Kent | 27 May 2014, 09:02 AM Agree 0
    More government intervention, no wonder small business is wilting on the vine in this country.

    Try this for size, as a broker no guaranteed salary, no holiday pay/leave loading, sick leave, salary continuance, suoperannuation and some bureaucrat sitting in APRA has the nerve to suggest upfronts should be trimmed! You cannot be serious!
  • SIDBROKER | 27 May 2014, 09:10 AM Agree 0
    To Clarke Kent. The problem is these public servants think they are superman. They are a protected species. They can be completely incompetent as the above demonstrates and we just have to keep paying them. They would not last in the real world the same as most pollies. Mr. Abbott should trim his department clearly they are a burden to us all.
  • Old Broker | 27 May 2014, 09:13 AM Agree 0
    You see , someone woke up out of bed this morning and has worked out we "get paid too much"! But why is the UK and US model all upfronts. Why is the real estate model all up front. What about what agents tell their buyers and how the investment property is not a "financial product" hence out of the advice sphere. Where is the MFAA and FBAA or are they too busy counting their memberships. As someone once said the mortgage game will be great where we go back to no brokers and the big 4 doing all the loans and also a 4% spread on the cost of money. Have a nice day!
  • John from Geelong | 27 May 2014, 09:20 AM Agree 0
    It is not that we are paid too much, it that we don't care about the well being of our clients or our product suppliers. I've been broking for 15 years so clearly I just care about up front commissions and am happy whether my client succeed financially or not.

    Anything a broker can do is simply a reflection of the process of the lender. But we are the ones held financially accountable.

    Ah well, better to be a broker than run main street retail.
  • Tony Broker | 27 May 2014, 09:35 AM Agree 0
    Typical " Cheap Shot " at Hard workers trying to make reasonable living.
  • Dave Robinson | 27 May 2014, 09:46 AM Agree 0
    It's a "draft"!
  • Lender | 27 May 2014, 09:52 AM Agree 0
    APRA are actively discouraging lenders from offering high LVR loans, but in many states, there is still a first home owners boost or incentive. Not only do we have conflicting paths, the assessments completed by APRA show very little resemblance to the real world, but as the regulating body, you cannot risk non compliance as they can remove your ability to conduct business.
  • A Poor Reason Always | 27 May 2014, 09:59 AM Agree 0
    Obviously APRA has no idea what majority of professional brokers do and point out rouge traders as their 'experience'. Very Insulting to majority of us. How much is the Bank soliciting APRA staff? Perhaps this needs to be investigated. Always the soft target. Good time for MFAA & FBAA to step it up for us mere brokers.
  • Jerry Gibb | 27 May 2014, 10:06 AM Agree 0
    What a crock next step will be pay no upfronts.
  • Ray_Perth | 27 May 2014, 10:25 AM Agree 0
    What will be interesting is the response back to APRA by FBAA and the MFAA.
  • Tony Ramage | 27 May 2014, 10:37 AM Agree 0
    APRA has amazing values including Integrity, Collaboration and Accountability to name a few, We need to email them
    particularly given that they "welcome independent scrutiny, and respond promptly to aspects of our performance that are identified as needing improvement" and have them justify these comments.
  • Bottom Line | 27 May 2014, 10:58 AM Agree 0
    When a system works (Aust 2007), every government body wants to tinker & modify it, so they can lay claim to part of its success. Had it crashed burned in 2007 - like overseas, they wouldn't be going anywhere near our industry. It's all about empire/career building.
    Interesting how so much of our industry has changed from what worked, to this new 'best world practise' - yet world's best practice failed.
    Always strange when winners adopt the philosophies of the losers.
  • V | 27 May 2014, 11:19 AM Agree 0
    What about the fact that 55% of loans are not originated by brokers?

    What about the fact that Banks pay Upfront Only Commissions to referrers such as accountants through their retail channel?

    What about the fact that brokers also have to contend with the risk of clawback on commission?

    APRA's suggestions are highly inflamatory in targeting brokers here. Their argument should be targeting lender policy only! Not payment of upfront commissions to brokers whom actually do the work and take on the risk to get paid.
  • Melbourne Broker | 27 May 2014, 12:04 PM Agree 0
    Whoever wrote the guidelines at APRA are clearly out of touch with the real world, and not up to date with what has happened in with both brokers and financial planners in the last few years. I wonder if they have heard of NCCP.
    The comments below are all practices that most lenders have had in place for sometime now.
    "Other risk management practices APRA is pressing on lenders includes putting limits on loans relative to incomes, reporting on broker relationships and performance, stress-testing borrowers and taking care when rapidly expanding market share"
    Another govt. organisation justifying its existence.
    I'm looking forward to the response rom the MFAA and FBAA.
  • Papery | 27 May 2014, 12:37 PM Agree 0
    Agree.. a load of rubbish.....whoever penned this within APRA should be highly embarrassed or at least update the data sets it relied on, which appear to be at least 5 years out of date!

    Cant wait for Denise to jump on this particular
  • Broker | 27 May 2014, 02:18 PM Agree 0
    Get a clue APRA
  • Paul NQ | 28 May 2014, 09:10 AM Agree 0
    Typical Public Servants, clueless. If Upfronts affect the quality of loans how about bonuses within banks or set Targets for Bankers, their jobs can be on the line if they don't meet targets surely these can affect submission quality. I have no evidence to back that up but according to APRA/ASIC I don't need any, I suspect it's the case so I will paint them all with the same brush.
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