MoneyQuest Managing Director, Michael Russell, has called for calm in the wake of ASIC’s current review into Mortgage Broker Remuneration Structures.
“Much of the commentary in recent weeks has been very disappointing and clearly designed to sensationalise what we in the industry, always knew was inevitable. There’s certainly no reason to get caught up in the sensationalism but rather as an industry we need to remain calm and very confident in the standards we now work to,” said Mr Russell.
The review is the first time ASIC will look at how lenders remunerate brokers and to this end, MoneyQuest wasn’t at all surprised when learning of the review, given the growth in the industry and the recent FOFA reforms that ASIC engineered in financial planning.
“Talk of commissions being at a cliff edge are completely unfounded, particularly when ASIC itself has said on more than one occasion it is going into the review without any pre- conceived views. Furthermore, recent comparisons with the UK and US markets have been incredibly misleading and I really hope that Australian mortgage brokers haven’t been lulled into thinking we are destined to go down the same path. The Australian mortgage market is almost the polar opposite to that operating in the UK and US. While fixed rates, short loan lives and churn are the norm in these markets, here variable rates, longer loan lives and effectively zero churn are our foundation,” explained Mr Russell.
“Truth be known, Australian mortgage lenders are more than happy with the status quo and are certainly not campaigning for commissions to be abolished. Trail commissions in particular allow lenders here to enjoy customer longevity and the opportunity to enshrine products per customer as a key KPI within their business.
Mortgage brokers have long established ourselves as a suitably priced Omni channel for our lenders and we have every right to be extremely proud of the standards to which we conduct ourselves. It’s been nearly six years since national licensing and responsible lending reforms were introduced and Australian mortgage holders have not only been the beneficiaries but have voted with their feet in support of our value proposition” outlined Mr Russell.
“Finally, while we fully expect to see some remuneration changes to come from the review, we are very confident they will be measured and implemented in full consultation with both the industry and customers best outcomes at heart.”
