White label products to come under ASIC scrutiny

by Julia Corderoy26 Nov 2015
White label mortgage products may also come under the microscope in ASIC’s forthcoming review into remuneration structures in mortgage broking, the chief executive of the Finance Broker Association of Australia (FBAA) has claimed.

In the government’s response to the Murray Financial System Inquiry (FSI), the Treasury said it plans to address misaligned remuneration incentives by “reducing and improving the disclosure of conflicted remuneration in life insurance, stockbroking and mortgage broking.”

More specifically, the government said it will task ASIC with reviewing remuneration structures in the mortgage broking industry by the end of 2016.

The remuneration review is also likely to extend to white labelling too, according to Peter White, the CEO of the FBAA, who met with the assistant treasurer and minister for small business, Kelly O’Dwyer this week. 

“It is not just about remuneration and ownership considerations but it is also how it impacts on white label products that might be provided by that bank that is investing in the business,” White told Australian Broker.

“They are looking at the commission structures in the industry and how that also interplays with transparency of ownership. For example, if you have a mortgage network owned by CBA and their white label product is provided by CBA, if there is an imbalance in commissions because of that you could see how they would have a concern from an ASIC level that there may be an incentive to provide a white label product over anther product if it is paying more commission.” 

“[Kelly O’Dwyer and I] had a discussion about that, especially when it is very public that commission is being looked at, so when you run the two together then that is a logical step and the logical thing to be looked at.”


  • by SEQ BROKER 26/11/2015 10:00:00 AM

    ASIC making work for itself. FIGJAM scenario here. The commission is advised in writing to a borrower in the credit proposal/quote. Your accusation is that a broker will place a client into an unsuitable loan for a few bucks. What
    a waste of time investigating that. Most lending is policy driven, and if a borrower is a strong borrower then it is price driven. To compete with price on a white label you will have to lower your commission.

    Another case of a blind man riding by on a horse being able to see better than ASIC!

  • by CBA White Label 26/11/2015 12:53:47 PM

    I hope they do check what CBA pays brokers who write white label loans.

    If they do ensure that the remuneration is the same, I will get a pay rise!

    Come on down ASIC.

  • by Dave Robinson 27/11/2015 12:53:56 PM

    CBA white label be careful what you wish for. CBA may just find it's not feasible to pay you properly and let you go.