Second industry forum lays remuneration foundations

by Miklos Bolza20 Jul 2017
A second joint industry forum has been held between major players in the broking and banking fields, agreeing to a framework in response to the Australian Securities & Investments Commission’s (ASIC’s) broker remuneration review.

Participants included representatives from five major industry associations – the Mortgage and Finance Association of Australia (MFAA), Finance Brokers Association of Australia (FBAA), Australian Bankers’ Association (ABA), Customer Owned Banking Association (COBA), and Australian Finance Industry Association (AFIA) – plus those from select aggregators, lenders and brokers.

The meeting, which was held 18 July in Sydney, was chaired by the National Australia Bank (NAB) and deputy chaired by Connective.

Attendees discussed the draft terms of reference for the process, began the design of a cross-industry working group structure, and started to develop an engagement and reporting plan to ensure the forum works closely with all stakeholders.

The next important step will be to strengthen partnerships with consumer groups, ASIC and the federal government, ABA executive director of retail policy Diane Tate said.

“We want to ensure their views are heard and reflected in the industry response. The industry will stay focused on ensuring that how mortgage brokers are paid, and the way this is structured, delivers good outcomes for customers.”

MFAA CEO Mike Felton said that the forums demonstrated the progress all parties were making in working together as an industry.

“Now is the time to maintain momentum and work together to ensure we achieve a balance between strong competition across the industry and good consumer outcomes.

“It is important that the process is broadly consultative and we will soon have cross-industry working groups in place, focused on creating improved quality measures and solutions for the issues raised by ASIC.”

Felton told Australian Broker that there was still a strong sense of collaboration and common purpose between all parties in tackling the task at hand.

FBAA executive director Peter White said the goal of ensuring positive beneficial consumer outcomes was extremely important.

“At the same time we must also ensure that the broker value proposition to borrowers and the Australian lending landscape is reinforced if not strengthened by this process, and not diminished.”

COBA director of policy Luke Lawler said the association supported an industry-led approach in responding to ASIC’s proposals.

“This forum is making progress on a framework that will help ensure that brokers can continue to deliver for consumers and competition.”

AFIA CEO Helen Gordon said the association was looking forwards to contributing to the forum’s proactive engagement with government as well as “working with all participants on solutions to effectively address identified key risk areas in a way that protects customers while continuing to give them choice on how they access mortgage lending”.

The forum will continue to meet monthly to develop responses to ASIC’s proposals as well as Sedgwick’s recommendations for third parties. It will formally present its progress to ASIC, Treasury and the industry by the end of the year.

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