Broker groups are hitting back at the royal commission after the Commonwealth Bank’s CEO discussed remuneration at a hearing.
CEO Matt Comyn was the first to appear in the latest round of Royal Commission hearings, where counsel assisting Rowena Orr QC grilled the bank boss on the bank’s misconduct.
The hearing on Monday (19 November) spent a considerable amount of time discussing the way mortgage brokers were paid.
Comyn revealed he had wanted to end broker commissions back in April 2017 but feared that making the first move would be a disadvantage.
He confirmed to Orr that he would prefer brokers be paid a fee for service and hoped for regulatory change over trail commission.
Mortgage groups have hit out not only at Comyn’s responses, but also at the Royal Commission for focusing on the topic.
MoneyQuest group has said the Royal Commission should be called out for “dropping its guard in not doing what it was established to do”.
In a letter to MoneyQuest brokers it said the commission was supposed to investigate misconduct, rather than the “perceived remuneration conflicts”.
The group said the “most alarming” thing was the soft tone between Orr and Comyn and the “absence of appropriate questioning”.
The letter listed 13 issues discussed during the hearing in which they thought there should have been better questioning.
It also said, “The afternoon resembled more of a convivial discussion on the merits of CBA’s proposed strategic intent to change the way it remunerates mortgage brokers.
“Fashioned by CBA under the guise of improving consumer outcomes, there’s been no evidence tendered to date that the current commission’s structure has in some way not delivered good consumer outcomes.”
One of the 13 points MoneyQuest believed should have been expanded on, was: “When questioned as to whether brokers do any work for clients during the life of their loan to earn their trail commission, CBA replied that brokers do very close to none.
“This view appeared supported by the RC which in itself appeared uncomfortably close to CBA with its general banter and lack of appropriate questioning.”