Banks, non-banks, aggregators and brokers have recognised the positive industry outcomes of the broking community during a discussion forum on ASIC’s remuneration review, the Sedgwick review and future reforms.
The event was the first of its kind for the industry with the Australian Bankers’ Association (ABA), the Mortgage and Finance Association of Australia (MFAA), the Finance Brokers Association of Australia
(FBAA) and the Customer Owned Banking Association (COBA) coming together in Sydney on 9 June.
The forum was an opportunity for the industry to share views on issues raised in these reports and the potential impact of proposals on brokers, aggregators and lenders.
“This is a unique step forward for our industry to see everyone sit around this table with a clear view to support best practice and good consumer outcomes from this process, whilst supporting an industry sector that has positively delivered so many positive outcomes to the lending landscape over the past 27 years,” said Peter White, executive director of the FBAA.
The main focus of the forum was forming an understanding of where each of the industry bodies was coming from, he told Australian Broker
. Strict ACCC anti-cartel guidelines were followed by all attendees, preventing discussions on topics such as pricing models and commissions.
“It was about having an open discussion with the ABA, various banks, aggregators and brokers that were there around how certain things can play out, how certain goals can be achieved, whether certain things are appropriate, etc.”
The biggest takeaway from the forum was the recognition of the role brokers play in the industry, White said.
“One of the great things that came out of this was that everybody agreed that the broker channel is invaluable, it has provided invaluable growth to our industry, and it provides a great service. There were no discussions around destroying the industry and putting a match to it. Everybody’s on the right page about positive outcomes.”
Other points of discussion lay around clarifying certain important points such as what a soft dollar commission actually is and what constitutes one, White said.
MFAA CEO Mike Felton
said that the forum was a crucial step in determining how the industry responds as a whole to ASIC’s proposals on broker remuneration.
“This meeting demonstrates that our industry is serious about self-regulation and has the maturity to work together across different stakeholder groups to effect the required change and ensure customer outcomes continue to remain front of mind.”
Felton told Australian Broker
that attendees discussed the importance of industry uniting together in response to the ASIC review.
“We went through a number of recommendations. We did some thinking around the table on those and also the principles we adopt around the way we look at that.”
There was a clear commitment by all industry groups to strong consumer outcomes, transparency and accurate disclosure, he added.
“At the end of the day, this is a fantastic outcome in itself.”
However, he said that it was early days in an ongoing process of self-regulation.
Each of the industry bodies will now submit its own industry papers to the Treasury on the ASIC remuneration report by the due date of 30 June. A second forum will be held next month after submissions have been handed in.
The MFAA will continue creating this final submission through its national aggregator forum, national lender forum and broker regulatory roundtables.
“We take the feedback from all of those member groups and we will be constructing an MFAA response on behalf of the industry by 30 June when it’s due.”
ABA executive director of retail policy Diane Tate
said that this first meeting was an important step to create an industry-based response to calls for changes in the mortgage industry.
“We have heard these calls to change incentives and governance arrangements and we look forward to working with the industry, in consultation with the government and subject to all competition law obligations, on reforms to support good customer outcomes.”
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