Brokers split on possible regulation change

by Rebecca Pike13 Apr 2018

A survey has revealed just how many mortgage brokers are concerned about the public perception of their industry.

More than 65% of brokers surveyed by MyState said they were seriously or moderately concerned about the effect of the Royal Commission.

Seventeen percent said the focus on brokers was ‘unfortunate’ but also ‘self-inflicted as there were rogue mortgage brokers in the past that damaged the industry’s reputation’. 

The broking community was split in its attitudes to the Australian Securities and Investments Commission (ASIC) also recently shining the spotlight on lending standards.

Thirty-seven percent of respondent brokers were in support of greater industry scrutiny by the regulator.

Meanwhile, 28% said that it was a ‘political exercise designed to benefit non-broker interests’ and 35% said they were in two minds as to whether broker reputations would be tarnished.

As a result of both the Royal Commission and a recent draft Productivity Commission report, talk has surrounded the possibility of replacing broker commissions with a fee-for-service model. Twenty-three percent thought this outcome was a ‘strong possibility’. However, 42% of respondents said it was unlikely or would not happen, with 33% ‘evenly balanced’.

MyState Limited Group Executive Broker Distribution, Huw Bough said the survey results showed that while brokers had some real concerns, they were also passionate about their industry, open about problems and supportive of improving standards.

He added: “The Royal Commission has attracted a lot of attention recently, but it must also be acknowledged that well before the commission began representatives of Australia’s mortgage broking industry prepared a landmark reform package to improve customer outcomes and confidence in mortgage broking.”

The reform package, which was the result of engagement between industry bodies, lenders, brokers, aggregators and consumer groups through the Combined Industry Forum, agreed on six principles to ensure improved standards of conduct and culture, while preserving competition in mortgage broking.

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