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ASIC remuneration review has limitations, say broker associations

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Australian Broker | 20 Mar 2017, 08:25 AM Agree 0
The MFAA and FBAA broadly support ASIC's proposals but say some areas could cause problems
  • Anon | 20 Mar 2017, 09:43 AM Agree 0
    Why "partially owned" when it should be "majority owned", ASIC would like to see transparency and if this is the response it shows we still have a lot of education within the industry first.
  • Pathetic | 20 Mar 2017, 11:29 AM Agree 1
    Can someone explain to me why the industry bodies are supporting this nonsense. I mean we pay these mobs to advocate for us and after a massive attack on our industry they behave like good little children and don't make a noise. Are you kidding me get up and fight I don't want to hear that you support this I want hear that you think the whole thing is a joke and call for Kelly Odwyers resignation! Roll over on this one and good luck fighting the next one. Pathetic
  • Aaron | 20 Mar 2017, 11:38 AM Agree 1
    I am genuinely excited by the prospect that ASIC proposes our commission structure should be tweaked/fine tuned. They have acknowledged the competition created by our presence in the market place, and I am sure they now understand the abhorrent premise behind clawback commissions. No doubt they find it confusing that we are the only brokers in the world that incur clawbacks...I'm sure they would know that in 2008 we would send a fax to the lender with a couple of pay slips, a drivers licence, proof of funds to complete and notes. Post GFC we had to accept a significant haircut to commissions, increased clawback periods and an exponential change to the scope of work undertaken as a broker.
    Data Entry, Valuations, Pricing, Loan documents, and Compliance that has become it's own filing cabinet in my office.....Clawbacks may, and I say "may" have had their place 10 years ago. Now we fully package the deal so I am not quite sure why a loan must run over two years for a bank to make a margin..... And today I read both the FBAA and the MFAA are essentially happy with the outcome of the report....
    When will the MFAA or FBAA actually have a win for us. After 16 years in the industry I believe their mission statements is to "minimise our loses"
  • | 20 Mar 2017, 10:28 PM Agree 0
    Clawbacks need to be reveiwed. Since deregulation, the banks now pass a penalty or fees associated onto the broker. If ASIC were serious about making a changes for the better, they would make it compulsory that within the first two years and a refinance had occurred the broker had to have proof attached to a loan proposition that the refinance was either due to:-
    1) increased funds for a specifically stated purpose
    2) Placing the client in better financial position
    3) Was part of a strategic plan to aid the client in improving a bad financial history into an improved financial position. ie a broker tidies up a clients finances with non-conforming and improves the credit history of the client. After 6 months the client is in a position to refinance and reduce the clients monthly repayments and/or overall interest paid over the loan term.
    Also the broker must illustrate that the client had been explained the costs of the refinance, both in the short term and overall interest payable, and how the new loan compares to the existing loan in monthly repayments and total amount repayable over the two loans.
    As a broker who believes in responsible lending, if it can be proven that as a broker we have educated and worked with a client to improve their financial position over 6 or 12 months, why should we be penalised. If a client has been shown the facts and it reduces the monthly repayments, but also reduces the life of the loan interest payable- should we not be applauded for continuing t supply great client service after the initial loan has been settled?
    Instead clawbacks lead to - fixed rate loans being "suggested" as i have heard at some industry functions to protect the brokers income.
    • | 22 Mar 2017, 11:58 PM Agree 0
      Yep! hard to argue with any of that.
  • Caroline | 25 Mar 2017, 07:32 PM Agree 0
    Excellent and intelligent response
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