A brokerage is encouraging mortgage brokers and their customers to share their positive stories of broking.
Sam White, executive director at Loan Market, has said the broker story is not being shared in the Royal Commission.
White’s statement follows the Commonwealth Bank CEO’s appearance at the Royal Commission this week.
Matt Comyn was grilled on his thoughts on broker remuneration on the first day of the seventh round of hearings. He said he had hoped for regulation on trail commission and a move towards a fee for service.
When questioned on what brokers did after the loan was written to earn their trail commission, Comyn said it would be “limited”.
Commissioner Kenneth Hayne asked whether it was “limited or none”, to which Comyn said “much closer to none”.
White said the first days of the hearings had “shown how serious the situation has become for our industry”.
He also said it was “alarming” to see how the Royal Commission were so focused on broker remuneration instead of the banks’ misconduct.
He said, “In Loan Market’s submission to the Royal Commission’s Interim Report, we pleaded with the Commissioner not to take the banks word in redesigning broker remuneration and we compared it to allowing ‘the fox to redesign the henhouse’. Unfortunately, it appears those pleas have fallen on deaf ears.
“We expected Mr Comyn to say what he said, but what we are most disappointed in is that he has the Royal Commission and consumer journalists, both of whom have been so critical of bankers, appearing to have swallowed his message hook line and sinker.
“Where is the voice of the non-bank-owned broker? Before the Commissioner decides to make a blanket ruling that will affect tens of thousands of Australian businesses, there should be consultation with the industry outside the big banks.
“Further, what is alarming is how the banks have maneuvered the Royal Commission to centre around broker remuneration instead of their own misconduct. It has been a masterful move. Banks will win, competition will suffer as we return to a banking oligopoly and clients will be left to fend for themselves again.”
White also argued against some of the more specific points in Comyn’s answers. He said the idea customers would get lower interest rates if brokers were not paid commission was “laughable” and that “Australians deserve better”.
He added, “Is Mr Comyn seriously asking us to believe that for a bank expecting to make $50 billion in profit over the next 5 years that somehow saving $197 million in broker commissions over that period will enable them to reduce rates? Does he take us, and tens of thousands of small Australian businesses for mugs?"
As part of White’s response to this week’s hearings, he has urged the use of the hashtag #brokersworkforyou to share success stories and start taking control of the narrative.
He said, “I believe we need to ask our customers to tell our story around the great outcomes brokers provide every day. The entire industry needs to share these awesome customer testimonials on social media with the hashtag #brokersworkforyou.
“Because brokers work for the customer - always have, always will. We need hundreds, if not thousands of customer stories to make a difference and to start being heard by mainstream media, the consumer and the politicians. This isn’t over yet and we need our customer's voices to be heard.”