A petition to save the mortgage broking industry is gaining a lot of traction as the industry continues to fight against plans to change remuneration.
Broker Rob McFadden began the petition to call on treasurer Josh Frydenberg and prime minister Scott Morrison to ignore the recommendation made by the Royal Commission final report to change broker pay.
The petition also calls on the opposition government to ignore the recommendations. The Labor party has so far said it would agree in principle to every recommendation in the report.
McFadden, who has been a broker for 15 years and now trades under the company Hypothèque, said brokers had been unfairly demonised.
The petition reached more than 70,000 signatures by yesterday.
McFadden said, “When the report was made public on Monday, my initial thoughts were that 20,000 small businesses would be wiped out with the strike of a pen.
“When I thought more broadly, I realised the impact would be more far-reaching with so much reduced competition. I started the petition in 15 minutes out of frustration and never dreamed it would do so well.”
Disagreeing with Commonwealth Bank CEO Matt Comyn’s comments around trail commission during the Royal Commission hearings, McFadden said the ongoing service model is to review his loans every couple of years, review the terms and negotiate a better rate.
“There’s a common misconception out that trail is money for nothing,” he added. “We work damn hard for that trailing commission, and it allows us to keep in contact with our clients – just last Friday I did four rate renegotiations for existing clients.
“So this is the sort of work we do, and we do a stack of things – we do variations, we crunch numbers, we do scenarios – there’s a lot of work we do to earn that money. So the statement that it’s money for nothing is just a complete fallacy.
“Most mortgage brokers are small businesses, and most mortgage brokers get their new business through referrals, so if we don’t do the right thing by the client then they’re not going to come back, and they’re not going to refer us on to family, friends, colleagues, etc.”
Encouraging the rest of the industry to get involved, he added, “If every one of 20,000 brokers got 50 of their clients to sign, that’s a million votes. So please keep sharing.
“As a colleague pointed out today it’s not just the consumers and brokers that will be affected, jobs are at risk at the smaller and regional banks, plus staff at the big four who might have considered mortgage broking as a career after banking.”
You can sign McFadden’s petition here.