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“It’s not like commission is a dirty word”: FBAA

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Australian Broker | 17 Mar 2017, 08:25 AM Agree 0
The head of the FBAA has responded to certain details in ASIC’s broker remuneration review, saying brokers should be paid commission
  • Smoking Gun | 17 Mar 2017, 10:08 AM Agree 0
    Item 1 is the smoking gun - linking commissions to LVR's & not loan amount.
    This is not viable for banks or brokers.
    Paying less for a high LVR loan (which takes more work); will simply mean Brokers may start charging first home buyers who predominantly require high LVR loans, resulting in them needing more deposit again - not sure how this will have helped consumer outcomes?
    Those of us that can, may simply choose not to write first home buyer loans - which will be my business decision.
    By the time I weigh up that many are construction loans; with high LVR; take more hands on client time; require more processes/time eg FHOG etc etc, and will now be paid less income...then they may push towards being unviable to write (income divided by hours worked) time - not sure how this would help consumer outcomes.
    • David | 17 Mar 2017, 01:32 PM Agree 0
      That's exactly what I think, they are trying to help housing affordability and get first time buyers into the market. This is a massive strike against the first time buyer. The decision I'll be making is the same, to avoid high LVR loans.
  • what a joke | 17 Mar 2017, 10:21 AM Agree 0
    Agree it is a completely idiotic idea and goes to show the care and thought asic put into this review was minimal. I think they essentially just needed an item to put in the report which would elude to limiting broker commissions. Make no mistake this review was asked for by the minister at the request of the big 4 and this will be used as a sledgehammer to reduce broker commission
  • Broker | 17 Mar 2017, 11:18 AM Agree 0
    This review ( ordered by an ex NAB executive) has always been about amount that Brokers are paid by lenders and nothing else- the rest is just white noise.

    Amazing the level of respect that ASIC has towards the fake content contained bank ordered (and seriously conflicted Sedgwick review) - makes you want to throw up!

  • Outraged | 17 Mar 2017, 01:39 PM Agree 0
    You are CORRECT! Look at the fsi (financial system inquiry) they have 3 ex bank executives on there. Funny how they pushed the government to focus on mortgage broker commissions. It's a shame our laws are influenced and run by CEO's, our people in government have no backbone.
  • Broker | 17 Mar 2017, 02:22 PM Agree 0
    Rather pathetic isn't it , I didn't realise there was that many conflicted individuals involved in this farce.

    David Murray - Ex CBA CEO
    Crain Dunn - Ex AMP CEO
    Carolyn Hewson - Ex Westpac & BT Investment
    Kelly - O ' Dwyer - EX NAB Senior Executive

    Then throw the conflicted ABA into the mix , and presto here is the pre-determined outcome. Looks like its also got the full support of the MFAA board too !!

    One can only imagine the discussions that went on with the sole mission to slaughter the Broker market - a very sad system indeed.
  • Sore head | 17 Mar 2017, 02:35 PM Agree 0
    I don't think ASIC has really nailed what makes a good consumer outcome. No discussions about service provided or advice given being of any significant benefit. This is obviously far less important to them than any perceived interest rate differential between channels which turned out to be non existent anyway. If they need a reminder we provide:

    1) Competition between lenders.
    2) Service to consumers - Processing applications in an efficient manner.
    3) Advice to consumers - Loan structuring / spreading of risk.
    4) Conduits for change for consumers to chnage banks and banking arrangements.
    5) National distribution channel for smaller lenders.

    We cant do it for free.

  • Broker | 19 Mar 2017, 10:03 AM Agree 0
    Better ban those $1200-$1500 kickbacks that banks pay to customers that switch lenders too, as based on AISC logic this could also result in poor customer outcomes.
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