'Mortgage brokers are critical to the Australian economy'

"The fact that brokers were getting paid trail commissions enabled them to continue to operate and for the banks to come back into the market very quickly and start lending to Australians," he said at the event, which was hosted by The Adviser and Genworth.

"It also enabled the Australian economy to power on. Without mortgage brokers and without trail commissions, we would've had a really stagnant economy for a long time.

"I would say mortgage brokers are critical to the Australian economy – and so is trail commission."

Mr Haron's comments come after the Financial System Inquiry received several submissions that criticised commissions, with EY (Ernst & Young) being one party to suggest possible changes to trail.

Deloitte partner James Hickey backed Mr Haron's statement on the importance of brokers, and said the economy would suffer if lenders handled all mortgages.

"It's worthwhile being clear about the value-add that brokers provide," he told The Adviser.

"It's not just finding the best product with the best features and best price; it's also the broker guiding the client through the process and holding their hand."

Mr Hickey said brokers have made the mortgage sector more efficient through their specialised knowledge and software platforms.

Brokers also facilitate the risk assessment process by ensuring that borrowers provide lenders with all the necessary documentation in a clean submission, he added.

The MFAA's new chief executive, Siobhan Hayden, said brokers also help clients improve their financial position in a way that lender staff sometimes don't.

For example, a broker may consolidate a borrower's credit card debts as part of a mortgage, Ms Hayden said.

"Bundling those credit cards and refinancing them and getting rid of them under a housing structure potentially may not be done in a lender structure," she told The Adviser.

[Related: MFAA defends brokers at parliamentary inquiry]